Bridging the GP-LP Data Gap

A conversation with Kevin Guy(opens in a new tab), Head of Managed Data Services for Private Markets, S&P Global Market Intelligence.

What is the most important trend in data reporting in private markets?

Transparency stands out. Across the private markets, we're seeing a continued evolution of reporting standards and expectations across both General and Limited Partners. If an LP made a commitment to a private equity firm decades ago, they might have received an annual report with scattered details around fund holdings. Now, we're in an environment where more frequent reporting and deep details on items like portfolio company operating metrics, ESG data, and fund financial information is the expectation.

As we head into a turbulent market environment, we expect LPs to place even greater pressure on fund managers to provide transparency and consistency around reporting on fund financials, underlying asset information, operating metrics, and sustainability criteria.

What new challenges are arising in financial reporting?

Operational complexity continues to be a challenge in managing private market data effectively across the organization. Today, GPs report the same information in a variety of formats to their board of investors based on their individual preferences. Without a standardized industry reporting framework, firms must ensure that their operational setup (or service provider) can handle whatever comes their way.

The strain of this complexity is showing: In a recent survey of U.S. PE fund executives(opens in a new tab) we sponsored, the largest share of respondents (44%), cite the ever-increasing complexity of data as their most significant technology challenge.

Our iLEVEL Managed Data Service solves for this challenge through a combination of software and services to deliver a true end-to-end solution. It takes more than a point solution to meet and exceed the demands of our clients' increasingly complex data workflows. That's why we lean on a team of 200+ global experts, internal and external market leading technology, and S&P Global's proprietary data and scale to deliver unmatched data solutions.

How does the iLEVEL Managed Data Services help Limited Partners?

Our team takes on the heavy lift of data processing, enabling LPs to eliminate manual data entry, process data at scale, and reduce key person risk to engage in deeper analysis. With coverage of more than 15,000 private capital funds, we improve the efficiency of the entire data pipeline, from upstream document sourcing and tech-enabled processing to quality controls and data delivery. Today, we process 90,000+ private assets and 7.7 million fund and portfolio level data points annually at a 99.3% accuracy rate, delivering quality data to our clients faster than ever before.

How will the acquisition of Private Market Connect (PMC) impact the services you deliver to private market clients?

The full acquisition of Private Market Connect(opens in a new tab) enables S&P Global to aggressively pursue its Private Market strategy, driving an exciting set of enhancements for the next phase of data solutions.

First, our team can now increase the number of data items captured per quarterly report, particularly around fund financial and underlying portfolio company data from GPs. This makes it easier to identify deep portfolio operating metrics such as revenue, EBITDA, and net debt, along with conventional financial metrics from balance sheets, income statements and cash flows. By enhancing our data coverage, we can provide greater transparency to LPs as demand mounts for a better understanding of portfolio performance to mitigate risk and control costs.

Secondly, we will be able to scale machine learning and artificial intelligence technology across all datasets and documents to expand data capture capabilities, improving processing times by 50%. Not only will this enable our teams to capture more data on behalf of clients, but also deliver that data to our clients faster.

Finally, the PMC acquisition opens the door to develop new and exciting private market data offerings for our clients. For instance, our team can now explore how to link financial reporting with other datasets to create new value for investors. Imagine, for example, automatically linking portfolio company financial reporting with independent ESG data about that same entity.

What does the future look like?

Our ultimate goal is to enable seamless data workflows for our clients that help them gain clarity and control over their investment data. In the future, we expect direct integrations between GP and LP tech stacks, with shared data environments, formats, and identifiers, to boost efficiency and propel the industry forward as a whole. In addition to building the next generation of data processing and integrations, we have uniquely positioned ourselves to identify investment trends that will fuel our private market data to help clients make more informed investment decisions. At S&P Global Market Intelligence, our continued investment in our private markets data ecosystem is bringing us closer to enabling that seamless experience for clients we're striving for.

Learn more about iLEVEL Managed Data Services.