Standing out in a crowded field
It would seem to be a great time to be in the private equity business—and apparently a lot of people agree. The chief driver of growth in the post-pandemic world is the same as it was pre-pandemic: a growing institutional appetite for private equity investments.
With the private markets attracting larger amounts of capital and gaining greater influence in the global financial system, regulators have taken notice. Private equity firms have had to adapt to a changing environment and elevate their operational standards, particularly with its complex fee terms and return calculations that present substantial operational issues.
Accurately allocating profits, losses, expenses, and tax impacts among every investor over the lifetime of a fund entails specialized mix of expertise and technology from deal management to portfolio and investor accounting and reporting.
The demand for greater transparency and standardized reporting simply compounds these challenges for firms. Resilience and efficiency through automation may well determine how well a firm can manage risks and drive profitability.