05.02.2013
By Terry Flanagan

Private Equity Standardizes on Data

Members of the private equity industry have launched an initiative to define, maintain and promote a single data standard for sharing information between all participants in the private equity industry.

Called AltExchange Alliance, the non-profit, industry alliance for firms in the private equity markets has announced formation of a standard to simply the communication of data in the PE industry. Members of AltExchange include StepStone, KKR, Capital Dynamics, Unigestion and others.

The Alliance members have collaborated to define a detailed data format, enabling investors to streamline their workflows and analyze data more easily while reducing the fund manager’s workload to support individual requests for customized reports.

The data standard is a universal, open and evolving definition of data formats to simplify and streamline the sharing of information between fund managers, investors and other parties.

“We receive and aggregate data for our clients from hundreds of different fund managers, in multiple formats,” said Yves Damon, head of private equity product Management at Unigestion, a specialist asset manager. “By adopting an industry standard, we can receive data feeds in a uniform format, enabling us to create portfolio-level reports and analysis much more efficiently.”

AltExchange builds on the work of the Institutional Limited Partners Association (ILPA), whose mandate is to advance the interests of limited partners in the global private equity industry.

The ILPA’s membership totals more than 275 organizations globally, including public and corporate pension plans, endowments, foundations, insurance companies and other private equity institutional investors with over $1 trillion AUM.

“The remit is similar to that of ILPA, in that it’s focused on efficiencies of exchanging data between GPs and LPs,” said Stuart Keeler, chief operating officer at eFront, a provider of software for managing alternative investments that participated with several major private equity firms in founding AltExchange Alliance. “A lot of its members are also members of ILPA.”

The data standard uses tailored XML taxonomies, an open standard, and spans many relevant elements including portfolio company financials, investor organizations and contacts, fund information, cash flows, and capital accounts.

“The concept is similar to FIX, in that it will provide a universal means for organizations to provide and consume data supplied by another party,” said Keeler.

In 2012, ILPA announced a partnership with Cambridge Associates, an institutional advisor, to jointly construct a branded private markets benchmark, which includes over 1,800 institutional funds. The goal of the benchmark is to accurately and consistently represent the global investible universe and asset class performance for institutional investors.

As of September 30, 2012, the most recent quarter available, the ILPA Private Markets Benchmark for U.S. Private Equity reported a 13.55% ten-year return. Performance for international funds, excluding U.S. private equity and venture capital funds, was 13.95% over the same ten year period.

“The ILPA Benchmark is a representation of all contributing members’ portfolios and does not reflect the portfolio of any single member,” said Mike Elio, managing director of industry affairs at ILPA. “The difference between the new ILPA benchmark and other benchmarks currently in the market is that it is applicable to the members of the ILPA.”

Related articles

  1. Essentia analyses data to create behavorial “nudges” for fund managers' investment decisions.

  2. Corporate Bond Trading on the Rise

    With Adam Conn, Head of Trading, Baillie Gifford

  3. The partnership will develop suite of U.S.-listed, physically backed, digital asset ETFs.

  4. Corvil Deploys Real-Time Analytics

    The addition of Essentia behavioral analytics solutions is an extension of Northern Trust Whole Office.

  5. Upstart exchange has seen market share increase to near 4%.