PE Investment Management System Survey

Historically, most private equity players lack the core software required to operate.

The industry ranges from a myriad of small companies with a handful of employees to a few large well-known actors with a sizable geographical footprint. In technology terms, the smaller players are barely equipped, mostly relying on email exchange spreadsheets or accounting firms catering to small and medium-sized companies to perform critical business operations such as financial accounting, financial control, fund accounting, investor asset management, and regulatory reporting.

While some of the larger players have scaled up and invested in software systems or technological developments, they have only targeted some business areas such as accounting and data management. As a result, they are not fully automated, lack system integration, and still require substantial human labor to carry out low-added-value data collection and transformation to exchange data between management systems, compute net asset values (NAV), or prepare reports. In general, these players have either developed these systems internally or have acquired highly customized software packages. This results in heavy technological debt: the high cost of software maintenance coupled with poor agility to accommodate new developments.

In addition, the current COVID-19 crisis has further demonstrated that sound technology solutions are essential to keep businesses running.

The ongoing success of the industry and the changing regulatory and business environments are also driving a radical change in the private equity sector regarding how technology must be leveraged to support operations.