Institutional investors have long sought the diversification benefits of private equity (PE) and other alternative assets to boost the return potential of their portfolios. And as appetite for PE has increased, deal competition has intensified, along with the number of investors pursuing those deals. Family offices, pension funds, insurance firms, foundations and endowments hunting for yield have all fuelled significant growth in this space in recent decades.
With these dynamics has come increasing pressure on Limited Partners (LPs) to work more efficiently to deploy capital and seek a more diverse range of strategies and investment structures. But while strategies and operations have become increasingly complex, the reporting and monitoring systems tracking the management of those assets have not managed to keep pace.
Monitoring PE funds is far more complex than tracking market exposure and liquidity for retail funds. And the space continues to evolve as demand for diverse strategies increases, posing challenges for investors attempting to process more advanced data points on committed capital and liquidity horizons.
All of this is driving the PE industry to turn to specialist providers able to deliver the necessary technological platforms, operational expertise and outsourced service solutions. At IQ-EQ, for example, we have created a bespoke technology platform providing LPs with real-time data reporting and data analysis on their investment portfolio.
So what should LPs be asking to determine whether their current monitoring system is primed to boost productivity and reduce operational risk? In my new article on Funds Europe, I've identified three key questions...