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2020 was a year like no other. It brought about huge cultural,
technological and societal change and has also served to shake up
the asset allocator market. We look at how the key trends from 2020
continue to impact LPs this year and their relationship with GPs
and analyze how technology is responding to meet these market
demands.
1. LPs require deeper insight on GPs' underlying
portfolio companies
With the pandemic making travel and the regular conduct of
in-person business impossible, LPs and GPs faced the twin pressures
of needing to supplement the lack of in-person diligence and annual
updates from asset managers with deeper data requests and a
newfound need for solid technological infrastructure to get the
most out of that information.
As a result, we have seen a dramatic increase in the number of
questions LPs are asking GPs about their underlying portfolio
companies - from more frequent performance and valuation updates to
queries about operating metrics. With increased scrutiny being
placed on portfolio companies, LPs need web-based dashboards and
reporting to understand their exposures and risks more clearly.
iLEVEL is like no other software in the market—allowing LPs to
easily visualize their exposure to companies across their fund,
direct and co-investments.
2. LPs: From data processors to data
consumers
As allocators' own business models evolve, focusing on their
core investment business is a top priority. As a result, in 2020,
we saw more discretionary advisors, fund of funds and sophisticated
investors choosing to delegate data collection to best-in-class
service providers like us. Being more informed, making data-driven
decisions and holding managers to account for their financial
performance is turning LPs from data processors into data
consumers.
We have responded to this trend by investing in an expansion of
technological and process capabilities within our managed data
services offering. Not only are we processing data on more than
9,300 active funds a year, we're doing so using cutting edge
technology; processing data with greater speed and precision and
expanding our breadth of coverage to keep pace with our clients'
evolving needs.
3. ESG metrics are in demand
Despite the focus on the pandemic, ESG issues became more
prominent in 2020 and LPs have responded by demanding greater
detail from managers on the Environmental, Social and Governance
metrics driving their firms and their underlying investments. A
growing number of LPs have helped us shape iLEVEL to easily collect
and visualize ESG metrics from their GPs, especially as new ESG
disclosure regulation begins to take shape across
jurisdictions.
As we head into 2021, we will continue to collaborate with our
250+ global LP clients to ensure we are evolving iLEVEL in line
with their requirements and market trends. For more information,
please visit our dedicated webpage
or contact PCMGlobalSales@ihsmarkit.com.
Posted 23 February 2021 by Charles Silva, Head of Commercial Strategy, Limited Partners, Private Markets, IHS Markit
IHS Markit provides industry-leading data, software and technology platforms and managed services to tackle some of the most difficult challenges in financial markets. We help our customers better understand complicated markets, reduce risk, operate more efficiently and comply with financial regulation.
