Blog

Despite record distributions in recent quarters and investors looking to reinvest, many LPs still remain cautious over whether private equity as an asset class is too expensive, too aggressively financed or too susceptible to macroeconomic volatility as a result of liquidity limitations. It seems appropriate to discuss what these cautious fears come down to, namely risk.

The global financial crisis of 2008 changed the entire world of financial services, including the alternative investment market, and precipitated the rapid expansion of regulatory initiatives. New regulations, combined with increasing reporting demands from investors, have created an environment with a strong and growing focus on transparency, as well as an equally strong interest among managers in using technology to ease their regulatory burdens.

I’m not generally an early adopter when it comes to technology. I didn’t get a mobile phone until the late 1990’s, because I was ambivalent about their value. But the first iPhone floored me, and when I bought one, it changed the very nature of computing for me. Where earlier options failed to win me over, I’ve had no ambivalence at all about the value of the successive iPhones I’ve carried.

Increasing requirements of stock exchanges, government regulation, and voluntary initiatives are three emerging trends that attempt to provide investors with increased quality and depth of non-financial or environmental, social, and governance (ESG) information. While ESG reporting for Private Equity firm holdings may not be mandatory yet, understanding these trends and proactively developing policies and practices for ESG data collection and reporting is both pragmatic and strategic for GPs. There are many operational benefits of collecting and reporting on non-financial data of portfolio companies, but these three emerging trends illustrate the external incentives to do so.

A global perspective on private investment operations and opportunities is essential. In this article, eFront offers an international view of issues and trends relevant to the alternative investment market with dispatches from around the world from three of our business unit leaders.

On November 14, 2013, France signed an intergovernmental agreement (“IGA”) regarding FATCA with the United States, becoming the 10th country to join the global FATCA network taking effect on July 1, 2014. The Cayman Islands, Costa Rica, Malta, the British Crown Dependencies (Jersey, Guernsey, and Isle of Man), and the Netherlands followed suit shortly thereafter, bringing the total number of IGA countries to 17, and joining the ranks of the U.K., Denmark, Germany, Ireland, Japan, Mexico, Norway, Spain and Switzerland.

“Private equity has always been a people business,” said unquote” editor Greg Gille as he began his interview with Olivier Dellenbach, eFront CEO. More and more, it seems, it’s also becoming a software business. In an unquote” video interview recorded on July 3, 2012, Gille and Dellenbach discuss the current trends and coming changes in the private equity software solutions market.