As LP-GP relations evolve, the need for a clearinghouse of data is increasing

If there was a single word to describe the ideal relationship between LPs and their GPs, it would be "transparent," as evolving LP-GP relations support increasingly fluid exchanges of a wider range of fund and portfolio data. This theme will continue to dominate the conversation around LP-GP relations, but the way transparency is defined and supported will look very different in the years to come.

As a global provider of portfolio monitoring and data services, S&P Global has been helping institutional investors and fund managers establish greater reciprocity and visibility for the past 15 years. Despite the challenges, the private markets are closer than ever to a future where centralized, standardized, collaborative data exchanges transform the ways in which investors and fund managers interact.

The complications of liquidity, diversity and scale

Maintaining clear sightlines into private capital investments has never been more difficult as the scale and complexity of investments grow. In addition to allocations increasing, LPs are also diversifying across more investment structures and a broader range of asset classes, which fragments the data across multiple managers and diverse reporting styles. Meanwhile, increased sophistication is driving demands for more transparency into the context of portfolio performance.

Higher levels of uncertainty in the broader market and the global economy, including market disruptors and exit and overallocation challenges, are yet another complicating factor. Without visibility into underlying holdings and asset-level performance, it is impossible to shore up liquidity and mitigate exposures.

Portfolio monitoring and reporting technologies have played an integral role in helping GPs and LPs collect, consolidate and report on the high volumes of data needed to monitor these complex investments. Friction points persist, but three initiatives show great promise in solving them.

1)  Industry-wide standardization

The lack of standardized reporting in private equity has long been a sticking point for institutional investors, impeding their efforts to analyze fund performance, fees and investment strategies across the portfolio.

If the past two decades are any indication, LPs will continue to request more and more data as they enhance their expertise and refine their strategies. When those demands are shaped by individualized priorities and approaches, it places an untenable burden on GPs tasked with capturing millions of data points in different configurations for each investor.

Organizations such as the Institutional Limited Partners Association (ILPA) and the European Association for Investors (INREV) have a pivotal role to play in ensuring that the collection, distribution and utilization of increasing data volumes are sustainable for both investors and managers in the private markets. For technology providers, supporting the standards and templates established by these organizations will continue to be critical. 

2)  Managed data services

LP data requirements have grown significantly more sophisticated over the years. At the turn of the millennium, institutional investors tracked portfolio data manually and evaluated performance based on simple return metrics. Today, they are leveraging advanced technology platforms and data analytics to track and evaluate their investments, conduct performance attribution analysis and monitor risk proactively. Fund-level research and benchmarking are common practice, as is the analysis of portfolio concentration, exposure and risk and the analysis of the true drivers of return, which rely on deep performance metrics for portfolio assets.

Collecting the data from GPs is labor-intensive enough, but mastering, storing and making it available for downstream processes has strained the capacity of many LPs. Technology has lowered the cost and enhanced the efficacy of these efforts, but managed data services are an equally important part of the solution. Scale providers bring dedicated, automated processes for collecting and mastering fund-level and asset-level data from diverse sources so that LPs can access it in formats that lend themselves to risk mitigation, performance analysis and decision-making.

3)  Rethinking process efficiency

While automation and managed data services streamline data management processes for GPs and LPs alike, there has always been a fundamental inefficiency built into the relationships between these counterparties. For GPs, the burden hinges on the need to meet the bespoke reporting requirements of multiple LPs. For LPs, it involves harmonizing the data they receive in multiple formats from their GPs.

Industry leaders, including the GPs and LPs themselves and the advisory firms and technology providers that support them, are actively working together to address the issue, and it could have a far-reaching impact on the way private-market participants communicate and interact.

Through a combination of automation, data services and advisory networks, managers may soon be able to take advantage of a "one-to-many" reporting structure. In this scenario, real-time fund and asset data is transferred via a centralized clearinghouse to dedicated portals. For advisors and LPs, the data would power high-level portfolio views, exposure monitoring and performance reports in custom, preferred formats. For GPs, the process would eliminate a significant operational burden and encourage widespread participation.

A collaborative approach would unquestionably support greater LP-GP transparency, but the full impact of this model goes further. By adopting a clearinghouse approach to investment data, the private markets could eventually achieve the type of benchmarking capabilities that are typical in public markets.

Co-creating the future of private equity

As the provider of technologies and data services that connect GPs and LPs, our experience has shown us that when the relationship is collaborative, both sides benefit. Among our clients, there is a recognition that the aims—and the growing pains—are the same on both sides, as is the ultimate objective: to enhance visibility, insight and agility throughout the private markets. The need for a clearinghouse that reduces data friction and eases reporting is clear.

By bringing LPs, GPs, advisors and technology providers together in the spirit of co-creation, we can pioneer innovative solutions that advance the levels of trust and coordination among these market participants while dramatically reducing the resources required to sustain them.

The industry is excitingly close to achieving its ultimate goal of achieving parity in terms of access to data across public and private equity portfolios. This clearinghouse approach holds the promise of opening doors to new and more valuable reporting. It could even enable two-way communications in which GPs use the one-to-many framework to distribute fund data more efficiently and LPs use it to broadcast their mandates.

I will be speaking on this topic at SuperReturn International in Berlin in June and look forward to expanding on it further over the coming months.

This article was originally published in PEI’s PEI’s LP/GP Dynamic report in June 2025.