According to a study conducted by SS&C Intralinks, LPs are targeting a better relationship with GPs in the coming months, especially in the form of better report analytics, selected by almost two-thirds (62 percent) of respondents. Transparency is a key concern for LPs to meet their own fiduciary and regulatory duties. GPs can do better in this area — transparency is no longer just nice-to-have, but an essential communication and data tool.
If you are a portfolio company, you must provide transparent reporting to your private equity partner. I have been associated with PE companies for a long time, and I have heard some wild things. For example, “My family built this business over 20 years, and they (the PE company) don’t know what they are talking about. I’m not telling them, they won’t understand.” or “We can’t tell them what is going on.” Remember, PE companies have a fiduciary responsibility to their investors. If you are now a portfolio company and took your partner’s money, the very least you can do is be transparent; your tenure and equity depend on it.
There are many tools available to make reporting easy to create and share with your partners, including dashboards. If you would like help in this area, please reach out to us.