Software for Investment Portfolio Management Eliminates Private Capital Busy Work

May 16, 2023

Software for investment portfolio management eliminates busy work. Here’s how.

An overhaul for private capital firms

The phrase “investment portfolio management” calls to mind sleek offices with gleaming monitors and sophisticated professionals. Indeed, private equity and venture capital are elite fields, populated by some of the most agile minds. You’d be forgiven for assuming that specialized software for investment portfolio management is de rigueur. But beneath the glossy patina lies an unspoken truth: In many ways, private capital firms are stuck in the Dark Ages. (Or whatever you call the 1990s.)

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The data management status quo

Due to a combination of inertia, tech ambivalence, and aversion to big spends, private equity and venture capital firms have clung to decades-old operational practices. Many continue to rely on spreadsheets and other subpar data management methods to handle streams of fund and portfolio company information crucial to their businesses.

Ongoing reliance on spreadsheets invites inaccuracies, perpetuates inefficiencies, and burns brainpower. And, in firms that have yet to adopt software for investment portfolio management, such problems are not isolated to a single department: Teams across private capital firms contend with tedious tasks, risking potentially disastrous fallout. Consider:

Deal teams moving data

Members of deal  teams do more paper-pushing than they’d care to admit. Deal teams need to track portfolio company financials, often through a constellation of spreadsheets: Portfolio companies send over metrics in their chosen format. Deal teams move that information into their organization’s internal spreadsheets. The data may then be moved yet again to a sheet for comparing deals.

When one considers how many portfolio companies are being monitored, that’s a lot of time spent relocating data. What’s more, all that movement can turn a firm’s clean data into an error-ridden mess. Meanwhile, deal teams  who use software for investment portfolio management can spend more time actually sourcing deals, giving them a competitive advantage.

Finance teams ferrying figures

From valuations to back-office accounting, finance teams are collecting and manipulating huge amounts of data. Beyond comparing balance sheets for valuations, they also project cash flows, evaluate potential scenarios, and consider how investors value comparable companies. And, internal accounting requires finance teams to gather even more figures on a regular basis. 

Recognizing these drags on employee productivity, leading private capital firms are embracing software for investment portfolio management that easily ingest data and store financials—improving productivity by wide margins.

Investor relations teams gathering records

Keeping investors informed of portfolio company performance involves handling data requests (read: scouring spreadsheets for very specific information). It also means providing regular reports (read: manually preparing tear sheets and cash flow summaries).  And LPs want track records of existing funds, which entails…you guessed it.

For these teams, software for investment portfolio management is a godsend. Best-in-class systems automatically generate tear sheets and reports, freeing up IR teams for higher-level tasks.

Leading private market firms are saying sayonara to manual processes and adopting software specifically designed to automate investment portfolio management and create workflow efficiencies.

Want to learn more? Download our latest white paper, The GP’s Guide to Productivity: