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How to use private equity data for better decision-making

24 May 2022

Mario Cusinato

Commercial Director, Funds, Intertrust Group

Mario Cusinato

Commercial Director, Funds, Intertrust Group

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Outsourcing private equity data management gives a clearer view of your entire portfolio in a secure environment

Legacy systems are a burden for private capital funds in several ways. First, having data in various different locations and from different sources makes it difficult to monitor and control cash flow.

Second, it can be hard to understand how assets are performing without a single source of truth. Finally, outdated systems can mean missing the opportunities data brings for enhancing business decisions.

Private capital funds may find it challenging to combine key data from a variety of different sources. New and emerging technologies can help, enabling fund managers to concentrate on core activities such as performance and portfolio management.

Private capital funds face many challenges – from global economic uncertainty and pandemic recovery, to mounting Environmental, Social and Governance (ESG) pressures. Technology can speed up workflow, facilitate new fund launches and allow fund managers to offer new products and services.

A clear view of private equity data

Using technology can give fund managers a clear view across their entire portfolio in a secure environment across global jurisdictions. It can provide one source of truth and give insights that help structure future strategic decisions.

Our Future of Fund Technology report found that nearly two thirds of private capital funds plan to invest more in technology in the next five years, with an overwhelming majority saying increased technology and automation would be vital to growth in the coming years.

The report asked 300 C-suite decision-makers at private capital funds around the world for their views on new technologies in fund administration. Many said they were still waiting before investing.

Why are legacy systems holding back private equity data?

Legacy systems don’t allow private capital fund managers the flexibility to develop in terms of new technology, big data and artificial intelligence.

As a consequence, their funds risk being seen as behind the times, even while they are raising capital. This is important reputationally: private capital funds need to demonstrate ownership of data, with a system that can provide accurate performance data on request.

Legacy systems can also be a burden when managing large volumes of data and avoiding errors. Risk can be managed better through more data analysis.

Using private equity data to manage and analyse portfolio performance

Emerging technologies can generate key performance indicators (KPIs), calculate exposure to risk or compile ratios of exposure that aren’t possible without the right data. It is inefficient and time-consuming to maintain a legacy system where data is disparate and disorganised.

Having one clear source of data that can be analysed quickly and effectively lets fund managers generate investment information and insight in a timely way. They can also obtain forecasts and obtain a real-time snapshot of their portfolio, assets and performance.

Clear data speeds up the generation of reports, providing deeper insights and enhanced control over the portfolio. It also allows effective communication with investors because managers have the right data at their fingertips.

Investors increasingly want ESG, diversity and inclusion data. They need evidence that fund managers are in control.

Private capital managers need a system that lets them produce fast, accurate reports. Investors do not want to wait days for that information. The manager needs to be reactive and proactive. In terms of cost, technology can also create economies of scale.

New technology can enable fund managers to:

  • have clarity of data
  • satisfy investor demands for information
  • protect against errors and duplication
  • safeguard brand and reputation
  • reduce time and cost
  • free staff to concentrate on core areas such as raising capital and portfolio performance

How outsourcing can help with private equity data management

One way to achieve greater automation and data capability is via outsourcing.

The right partner can guide you through the transformation. You may not need to overhaul the whole system straightaway – consider a phased approach. A good partner will look after the operations workflow, enabling you to scale up your business if required.

Outsourcing is more effective than putting more in-house people and resources into managing the issue without solving the data problem.

When significant global events such as the war in Ukraine or a US Federal Reserve rate rise occur, you can immediately assess impact and exposure at a granular and strategic level.

How Intertrust Group can help

Intertrust Group is experienced in private capital and has a team of 150 people in London and a network of 50 offices around the world where our experts can provide advice for specific jurisdictions and can provide full corporate services.

We provide director services, company secretarial services and accounting services to structures from inception to end of life cycle.

Intertrust Group can act as consultants and partners to identify your needs, decide how to proceed in upgrading your systems and what technology will benefit your business most.

Our expertise gives us economies of scale, market experience and a clear vision of how companies can benefit from migrating from their legacy systems and harnessing data.

Why Intertrust Group?

  • Intertrust Group is a publicly listed company with 70 years’ experience   providing world-class trust and corporate services to clients around the world.
  • Intertrust Group provides a wide range of financial and administrative services to clients operating and investing in the international business environment. We help companies expand globally, offering support with restructuring, outsourcing and further developments.

Visit our website and get in touch for more information and talk to our expert team today