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eFront: Larger LPs Receive More Information From GPs

Paris based tech firm eFront has published a new survey entitled “Mind the Gap: a global survey of private equity reporting practices”. The survey covers almost 1,800 active alternative investment funds, providing insight into the state of private market investor reporting.

Key findings:

  • When requesting a standardised reporting template from GPs, the median LP can expect to have more than half of its GPs conforming with the request.
  • GPs that submit standardised reporting templates show IRRs by 10.2% higher than their peers.
  • Larger LPs tend to receive more information from GPs and are significantly more likely to receive template reports upon their requests.
  • The more LPs a GP reports to, the more information they receive. Each additional LP equates to a 5% increase in information received.
  • Conformant funds can provide 70% more information than the average non-conformant fund.
  • Funds larger than $10 billion are in 22% more cases more conformant than the funds with managed capital worth less than $1 billion. 
  • North American funds are by 34% more conformant to template requests than European funds. 
  • More than one quarter of GPs report inconsistently across different LPs.

Published today, “Mind the Gap: a global survey of private equity reporting practices” has found that best practice in private equity reporting is correlated with better performing funds. According to eFront’s data, high performing funds become more likely to conform to standardised reporting template requests and the difference in the information quality and quantity between conformant and non-conformant funds increases.

Tarek Chouman, CEO of eFront, commented: “As regards reporting conformance, excellence seems to be pervasive: the best-performing GPs also tend to be those with the most comprehensive and consistent reporting practices, typically via digital platforms. With standardised templates, LPs can expect to receive up to 70% more information than if proprietary quarterly reports are used. Furthermore, the quantity of information provided via templates increases with the number of LPs who request the same type of reporting template. One conclusion is that small to mid-sized LPs can benefit in terms of the quantity of information received from joining up with the larger LPs when requesting the data in the same format.”