As private fund CFOs and investors struggle to efficiently send and receive fund information, a good percentage of the industry believes things will never change.
Close to half (43 percent) of pfm readers polled in an online survey believe the industry isn’t capable of achieving a single data standard.
For the firm’s finance and investor relations function, the results portend GPs continuing to send PDFs with locked data that investors must rekey into their own systems for data entry purposes. Smaller LPs especially, who have less clout to demand ad-hoc reporting, have complained that the hodgepodge of different data formats used by GPs to send quarterly statements has made it difficult to capture fund data for risk monitoring and performance analysis purposes.
However, not all industry professionals are feeling as pessimistic. Roughly one in four pfm readers believe a single data standard can be achieved in the next ten years, while the same amount believe it can happen as soon as the next five.
The AltExchange Initiative, a non-profit consortium of private equity GPs, LPs and advisers, has brought the industry closer to a universal data standard. Earlier this year, the group released an updated version of its data standard that included crucial definitions for portfolio company metrics, a key step in convincing more GPs, LPs and service providers to back its initiative. However, critics contend that AltExchange’s historical and commercial ties to eFront will limit its success.