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Paradigm Shift in PE Portfolio Monitoring Process

Published on December 15, 2017 by Rohit Agarwal

Portfolio monitoring is an extremely critical task for general partners (GPs) during the life cycle of a private equity (PE) fund investment. Earlier, there was no single impenetrable process for monitoring portfolios. It was extremely challenging to manage enormous amounts of data at a single location. However, there has been a tremendous improvement in PE data management during the last 4-5 years. The paradigm shift in portfolio monitoring has been led by technology-driven software.

Today, various high-tech software are available including BEAT – a PE portfolio monitoring tool by Acuity Knowledge Partners – through which data of thousands of portfolio companies can be managed fairly smoothly and with a high accuracy.

The advantages of using automated database software over manual updates are numerous. Some of these are:

  • Dynamic dashboard analytics: After the global economy debacle in 2008, limited partners (LPs, or investors) have become extremely demanding. They monitor the performance of their investments quite frequently. Every now and then, they demand quick snapshots and performance summary of their investments from GPs.

Using BEAT, GPs can quickly generate customized dashboard reports (including charts and tables), which can be easily shared with stakeholders such as LPs and auditors. This helps GPs ensure greater transparency and increases investor loyalty.

  • Data accuracy: Collating all the data in one central database and checking them against the GP literature ensure the accuracy of data, which can be used by investment or marketing team members at any time. Additionally, collating portfolio company financials, operational KPIs, and valuation numbers in a cloud database ensures that everyone has access to the same and the latest data sets.

  • Easy data integration: Some PE software have excellent data integration capabilities with external sources including MS-Excel, Google file, and Tableau, leading to a two-way data flow. Data files can be uploaded or downloaded in a few seconds. Moreover, one can easily trace the source of files to revisit the data in case of any queries or clarifications.

Two-way Data Integration

  • Mobile access: One of the biggest advantages of using BEAT and other PE software is 24 x 7 accessibility. Even while traveling for business meetings, you can access important information, such as portfolio breakdown by industry or geography and revenue growth of invested companies, on your device including laptop, tablet, or mobile phone.

  • Increased focus on high-value analysis: Enhanced portfolio monitoring enables fund managers and teams to focus more on high-value analysis and less on less significant tasks such as data processing. This enhances a team’s capabilities in making smarter investment decisions.

Acuity Knowledge Partners is the market leader in providing PE portfolio monitoring services to PE and fund-of-funds.

Over the last 10 years, we have assisted over 20 clients globally in efficiently and accurately managing their PE portfolio. BEAT, our proprietary PE software tool, has a powerful system for accurately tracking, comparing, and predicting the performance of portfolio companies. It is a fully integrated solution that enables private equity firms to take full control of their portfolio life cycle. Moreover, BEAT is 30-40% more cost effective than other service providers’ systems and has a 40-50% shorter turnaround time.


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About the Author

PE and Strategic Research

Rohit has around 10 years of experience across asset management and private equity (PE). His current role involves providing support to alternative asset management teams on salesforce and e-front maintenance, financial reporting, and investment due diligence. Rohit has extensive experience across a broad range of analyses, including financial reporting, industry reports, due diligence memorandum, fund cash flow modeling, track record creation, fund revaluation models, client pitch presentations, quarterly market overview reports, and newsletters.

Prior to joining Acuity Knowledge Partners, Rohit has worked with Kotak Asset Management Company based in Delhi. He holds a Master of Business Administration (Finance) from Institute of Chartered Financial Analysts of India (ICFAI), Gurgaon.

Comments

Nishchay Dhingra

15-Dec-2017 12:55:31 pm

The blog provides interesting insights in the PE portfolio monitoring domain, the technological advances and how it can add value to various stakeholders.


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