The possibility for an industry-wide standard on data exchange appears more likely now that the AltExchange Alliance has widened its coalition to include the Institutional Limited Partners Association (ILPA), industry software vendor SunGard, fund of funds investor AlpInvest and “Big Four” accounting firm PwC.
Formed in May 2013, AltExchange now has 50 members made up of LPs, GPs, industry consultants and service providers, including heavy hitters like Kohlberg Kravis Roberts and Teacher Retirement System of Texas. The consortium wants to create a single standard for data sharing in private equity – and promote its use by all parties – to make it easier for GPs, LPs and others to report and share fund information.
In its nascent stages, AltExchange encountered resistance from the private equity industry’s major software vendors that facilitate LP reporting. The vendors viewed it as a disguised eFront initiative, largely because AltExchange signed a five year contract with eFront to certify documents running through the AltExchange validation platform.
The inclusion of rival software provider SunGard should “help alleviate those concerns”, said AltExchange founding member Stuart Keeler, who’s also eFront’s managing director of data initiatives.
Moreover eFront will no longer be the alliance’s main financial backer, according to a market source with knowledge of the matter.
“The alliance is self-funding and more active participants means less reliance on eFront to maintain momentum,” said Keeler in response to the tip.
It is understood that in April the alliance clarified its relationship with eFront during a meeting with other software vendors and industry players in New York City. Following that meeting SunGard came on board after it felt comfortable “that the validation platform in no way provides eFront any kind of market advantage,” said Lauren Iaslovits, chief operating officer of SunGard's Investran.
AltExchange has already completed phase one of its mission of defining “core quarterly data” terms like capital accounts, schedule of investments, and cash flow activity. In the coming weeks the group will begin phase two of its mission, which involves standardizing language more connected to portfolio company information reporting, according to Keeler.