Preqin, a leading provider of data, analytics, and insights to alternative assets professionals around the world, has released Preqin Special Report: Service Providers in Alternative Assets. For one section of the report, Preqin interviewed Altvia Senior Vice President Jeff Williams about the increasing demand for data and transparency in the industry, and how firms can provide it.
Jeff shares his perspective on three questions:
As PE/VC matures and more LPs allocate to a market with no shortage of managers, how has the relationship between LPs and GPs evolved?
Jeff observes that the GP-LP relationship, which should be a partnership, is sometimes seen by LPs as not exactly equal. However, he believes that the “balance of power” is shifting, in part because of increased interest from institutional investors who typically expect a high degree of transparency. He also feels that the growing number of managers and their need to compete with larger GPs has “led to greater acceptance of LP demands for transparency.”
PE/VC has seen significant consolidation with larger GPs assuming a greater share of LP commitments. How have factors like portfolio transparency and on-demand data shaped the competitive landscape?
Jeff points out that differentiation, especially for emerging managers, is harder than ever to achieve today. Those who have the most success are turning to technology for their edge. They’re using advanced, purpose-built solutions to tell data-driven stories and create better “customer experiences” that enable LPs to explore data on their own.
The GFC put risk management back into focus, which was further honed by the COVID-19 pandemic. How have LP demands for data and transparency evolved over the past decade, and are GPs willing to meet those demands?
What Jeff has seen since the GFC is a desire by LPs to better understand the underlying assets. And since many portfolio companies are privately held, GPs must provide data to LPs that they can use to assess their risk. He says that it seems more GPs are willing to meet the demand for greater transparency, with COVID-19 creating additional pressure in that direction.
More Important Information in the Report
Preqin’s report has more than 50 pages of interesting and enlightening information in sections on topics like:
- Why Sound Operations Are the Platform for Success
- Representation and Warranty Insurance Can Be a Leg Up, but May Not Be a Silver Bullet
- ESG Regulations and Legislative Changes on the Horizon?
- How Technology is Changing Fund Administration
- Why Process Automation Is the Future
The report also includes lists and data on the activities of fund administrators, fund auditors, law firms in fund formation, hedge fund administrators, hedge fund custodians, and many other industry stakeholders.
Click here to get your copy of Preqin Special Report: Service Providers in Alternative Assets.