FIS Blog

Is Your Investor Portal Just a Virtual Stack of Paper?


Christopher Ward | Tuesday, April 26, 2016

As a private equity professional, how often do you walk into your office and think, “I really wish there were more stacks of paper in here” We’re guessing not too often, and we’re guessing your partners would agree. This sentiment speaks to why virtual data rooms and investor portals have grown in both adoption and sophistication in the private equity over the past decade. So while you’ve likely given your stapler a break in recent years, is it now time to revisit – and revamp – your investor portal.

In the early 2000s, virtual data rooms emerged to effectively allow limited partners (LPs) to “help themselves” to general partner (GP) reports in the form of static documents. Your stacks of paper cataloged in a virtual environment. In recent years, however, portals – like the rest of technology – have evolved considerably. What was once static and inflexible can now be interactive and customized; data may be sliced, diced and represented dynamically on dashboards. The result has been a more open-ended approach to reporting, with benefits for GPs and LPs alike.

What kinds of benefits?

  • Investor portals can help increase your efficiency
    With rising regulatory costs, pressures on fees, and investors requesting more detailed information, becoming operationally efficient is a central challenge for the private equity sector.
    For GPs, there is much that can be done to streamline and integrate points in the investor reporting process. According to TABB Group, only 25 percent of private equity funds report that their systems are tightly integrated, with the remaining 75 percent split down the middle between firms that cite no integration at all, or integration through manual processes. The overreliance on spreadsheets creates unnecessary inefficiencies, with 44 percent admitting to being “stuck on Excel.”
    For LPs, the ideal investor portal provides search and filtering options to make it easy to find information, whether a quarterly report for one particular fund or tax information across multiple funds. If the result of a search is hundreds of individual reports, then the system should also allow the LP to download the files in bulk, further increasing efficiency.
  • Investor portals can reinforce your brand
    Forward-thinking private equity professionals know that a dynamic investor portal means more than getting a report from point A to point B.
    For GPs, interactive portals offer another opportunity to reflect their own company identity and build their brand in the eyes of investors. The investor portal should portray a consistent visual identity to investors, and serve as an extension of the overall corporate brand.
    For LPs, the expectation is that with robust and capable technology comes a simple, clean and intuitive user experience. And this reflects on the GP’s brand. Ultimately, it will be the user experience that truly differentiates one investor portal from another.
  • Investor portals can turn data into dynamic insights
    With data self-service now a meaningful and well-rounded reality, private equity firms have the tools at their disposal to transform data into intelligence.
    For GPs, rather than storing only static PDFs, an interactive investor portal allows investors and internal stakeholders to dissect and work with data to the level of detail they require, whether on funds as a whole or their underlying holdings. Through dashboards and other analytic tools, GPs can also offer unique ways to create and publish advanced data visualizations and dynamic reports. You can’t do that with a virtual stack of paper.
    For LPs, interactive investor portals can provide precisely what they need for more active portfolio management and informed decision-making: self-service access to highly detailed data. At any point in time, an LP can rapidly view balance information, analyze historical cash flows, or understand its unfunded commitment to a fund – quickly accessing and assessing data points to turn them into intelligence.

Above all, interactive investor portals have opened doors to a new, more self-service approach to reporting for the sector. Innovative portal technology offers funds and investors fresh opportunities to enhance efficiency, strengthen relationships, and improve transparency and insight.

So, what will it be – virtual paper or dynamic portal?

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