In today’s rapidly changing market, private equity fund managers are finding themselves between a rock and a hard place. On one hand, firms are handling more data than ever. On the other hand, regulatory oversight and investor demands have been increasing with no signs of slowing down. While firms remain highly focused on growth and raising capital, managers can no longer ignore the operational side of the industry. Traditional methods of data management, often consisting of scattered excel sheets and loosely organized folders, are a dated approach that will implode in the competitive PE market.
Still, fund managers are hesitant to overhaul outdated operational practices. In a 2016 private equity survey, Ernst & Young found two-thirds of respondents identify data management as the most significant challenge they face. This report also showed that 53% of fund managers polled consider data management as the most significant constraint in the consideration of implementing technology solutions. Digitizing data can be a daunting task. The largest funds have the luxury of building in-house technology solutions and the resources to train and equip personnel with new skills specific to the private equity environment. Mid-market funds with limited resources will have to be innovative to stay competitive.
Outsourcing to third-party administrators in conjunction with using emerging technology solutions is one example of how mid-level funds can achieve operational excellence. Investing in a scalable third-party solution that provides a central repository for managing, organizing, and quickly locating data improves compliance and provides superior value to fund investors. Technology, such as user-friendly portals, can provide access to data-driven business intelligence and key information at the click of a button. Investors can follow their investments at a granular level with data visualizations that provide exceptional transparency and go above and beyond heightened regulatory standards.
JTC’s fund administration solutions manage resource constraints, maximize transparency for institutional investors and regulators, and enable forward-thinking firms to manage the regulatory realities of tomorrow today.
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