By Joe Patellaro
A recent SS&C survey of private equity professionals (SS&C customers) and 2017 SuperReturn international conference attendees shows an increased focus on private equity operational efficiency. The data reveals that 88 percent of respondents reported being more operationally focused today compared to three years ago.
The reasons behind this are varied, but ultimately map back to protecting investor interests.
Here are some of the findings:
Investor Demand for Transparency
The top reasons respondents cited for being more operationally focused include demands from limited partners (33 percent) and enhanced reporting requirements (22 percent). Investors want separation of duties and built-in transparency in the accounting and reporting process to protect their interests within the framework of the limited partnership agreement. This also allows private equity firms to focus solely on managing investments and safeguarding capital.
Increased Regulatory Environment
Regulatory pressures ensure transparency will continue to be a focus for general partners.
Nearly half of respondents (47 percent) ranked regulatory changes as the top factor expected to most impact private equity within the next year. However, only 17 percent of respondents cited changing regulations as the driver behind their increased focus on operations.
“These survey results confirm what we are seeing in the marketplace,” says Joe Patellaro, managing director, SS&C GlobeOp private equity services. “A growing number of private equity organizations look to third parties such as SS&C to procure fund administration, operational, performance, investor reporting, regulatory, and other services.”
“As the world’s largest fund administrator, we offer a unique combination of world-class service, expertise, and technology to meet this growing demand for complex solutions,” he continues. “We are well positioned to be a long-term partner for the industry’s continuously evolving needs.”