As markets continue to become increasingly volatile, the need for real-time portfolio company performance evaluation and reporting becomes ever more vital.
Challenges include managing M&A pipelines, both for primary investments and bolt-on opportunities, as well as tracking hold period performances at a granular level.
Dealing with a broad spectrum of reporting capabilities among portfolio companies and different reporting standards across multiple geographies compounds the difficulties in achieving synthesised reporting for monitoring and investment committees and thereafter LP reporting.
The target must be accurate, real-time risk assessment and operational KPI performance monitoring that allows for rigorous and dynamic decision taking, within the context of fast moving and uncertain markets. Reporting reduced to hours rather than days to identify performance trends, drive and evolve transformational growth strategies and manage risk in ever changing market environments means the difference between stellar and lesser returns.
GPs are investing heavily, across all markets, in easily onboarded, homogenised and flexible data capture systems which are then integrated with custom fields and workflows to create powerful management tools. Designed customised dashboards and reporting allow for optimised tracking of financing solutions and monitoring of covenants and improved discipline across teams.
With c. $3.6 trillion of dry powder across 12,500 private equity and credit firms world-wide today, the need to monitor, assess and take the best decisions in turbulent markets, not only for existing portfolios but for origination and investment programmes, has never been more acute.
EQ – The challenge of optimal monitoring in turbulent markets
