For private equity funds, data … it’s serious
Since the 2008 financial crisis, regulations governing investment activities have tightened, imposing more transparency on private equity funds. The first effects on the relationship between funds and their investors are felt, according to the EY study “Disruption, a seismic shift in the private equity industry»Published in early April. To carry out this study, EY interviewed 103 private equity funds, and 88 investors (mainly pension funds, financial institutions, and funds of funds).
We learn that in 2015, 45% of investors expect more reporting from private equity funds, i.e. 4 times more than the previous year (they were only 11% in 2014). However, only 40% of private equity funds expect a clear investment strategy, against 64% the previous year.
Data management, a challenge for 63% of private equity professionals
Despite the strengthening of regulations governing this activity, private equity remains one of the preferred products for investors (for 47% of respondents), well ahead of infrastructure (21% of respondents, +11 points compared to 2014), and before real estate (16%, -10 points compared to 2014).
Not surprisingly, the supervision of private equity funds has increased: the number of funds audited practically doubled between 2013 and 2015 (from 28% of funds to 47% of them).
When asked about their main challenge today, 63% of fund managers say they are faced with the problem of collecting and analyzing the data required for reporting.
Top 5 information requested by investors from the fund
At the same time, investors state that they are generally dissatisfied with the feedback they receive from their partners (44% are not satisfied with the information they obtain following aborted transactions, and 42% regarding the information received during annual meetings).
* Methodology: EY, in partnership with Private Equity International, interviewed 103 private equity funds and 88 investors, between August and December 2015 across the world. 38% of investors work in pension funds, 29% in financial institutions, 24% in funds of funds, 5% in family offices and 4% in sovereign wealth funds.
SEE the full study:
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