Standardizing investor reporting with ILPA and Invest Europe’s templates

Operationally, the private markets industry can be a black box. While all GPs share similar goals in terms of managing funds and generating profits for their shareholders, every firm has their own way of running their investor reporting processes.

There was clearly a need for a definitive, best-practice guide to help GPs better address their LP’s reporting needs; thus, many financial services associations have released their own iterations of reporting guidelines. The most widely recognized and used among these are from the Institutional Limited Partners Association (ILPA) and Invest Europe. Both have released a series of templates which serve as standardized frameworks for reporting financial and operational data within the private markets industry, providing clarity and efficiency for both GPs and LPs.

“One of the biggest recurring pain points our GP and fund administrator clients raise with us is investor reporting,” says Sun Suriyapatanapong, Co-Founder and Head of Product at Quantium. “The ILPA and Invest Europe guidelines are an excellent starting point, but there’s still additional, ongoing work required on both the fund managers and administrators’ side.

“GPs have to transpose these templates into their own operations, whether it’s reworking complex Excel formulas or hard-coding new reports into their legacy systems – which still takes time and leaves room for error through misinterpretation. To add an additional layer of complexity, the guidelines are continuously evolving to reflect changes in regulatory requirements, industry best practices and stakeholder expectations, requiring fund managers and administrators to stay informed on any updates and adapt their reporting processes accordingly. This requires ongoing investment in training, process improvements, and technology upgrades.

To address these challenges, many GPs and fund administrators are taking steps to:

• Invest in automation: Investing in automation tools and software solutions can help streamline the process of transposing reporting templates and reduce the potential for errors. Automation can also facilitate the integration of new reporting requirements into existing systems, making it easier for GPs and fund administrators to stay compliant with evolving guidelines.
• Enhance data governance: Implementing robust data governance practices can help GPs and administrators ensure the accuracy, consistency, and reliability of reported information. By establishing clear data standards, validation processes, and quality controls, fund managers can minimize the risk of errors and maintain the integrity of their reporting processes.
• Engage with industry associations: Engaging with industry associations such as ILPA and Invest Europe can provide fund managers with valuable insights, resources, and support for implementing reporting guidelines. These associations often offer training programs, workshops, and best practice guides to help GPs and administrators navigate the challenges of compliance and stay abreast of industry developments.
• Collaborate with service providers: GPs can also collaborate with external service providers, such as accounting firms, technology vendors, or consultants, to streamline the implementation of reporting guidelines. These providers can offer specialized expertise, technology solutions, and tailored support to help GPs optimize their reporting processes and ensure compliance with regulatory requirements.

At Quantium, we’ve taken the guesswork out of the guidelines by building the most commonly used ILPA and Invest Europe templates into our reporting module. Clients can access bespoke reports via our library of best-practice templates, including (but not limited to) those listed below:

With Quantium, all our templates (including ILPA/Invest Europe reports) are plug-and-play – once they are set up on your account, you can run and refresh the reports for different periods and for different entities, with instant data output.

Report formats and templates are constantly evolving; the good news is that Quantium’s reports are also easy to adapt in line with industry standards. Users can easily modify the templates via self-serviced tools or seek support from Quantium Client Solutions specialists. Our ILPA and Invest Europe templates will always be updated whenever changes to the framework are announced, simplifying the normally tedious process of updating report templates for fund managers.

Lastly, Quantium’s software also fully supports integration with Microsoft Office applications, making it easy for you to export data tables in Excel and charts into PowerPoint, Word and Excel; all with the underlying data so you can make quick, last-minute edits if needed. By taking a proactive and strategic approach to addressing the challenges of implementing reporting guidelines, GPs and fund administrators can enhance the efficiency, accuracy, and reliability of their reporting processes, ultimately strengthening their relationships with their investors and driving long-term success in the private equity and venture capital industry.

ILPA and Invest Europe Reports – Frequently Asked Questions

Quantium’s clients often ask us for our advice on best practices for investor relations and reporting. Below, we have compiled our team’s answers to our most frequently asked questions, in which we delve deeper into the ILPA and Invest Europe reporting templates and explore how they help enhance GP/LP relations.

What are the ILPA and Invest Europe reporting guidelines? 

Institutional Limited Partners Association (ILPA) is a global organisation headquartered in the US. Their reporting guidelines are based on a comprehensive framework designed to standardize the reporting of private equity fund performance and operations, including financial metrics, investment valuations, fees, and expenses. ILPA’s guidelines have been adopted globally, but are most widely used in the Americas.

Similar to ILPA, Invest Europe is an industry association; the key difference being geography, as it is based in Europe. Invest Europe also provides guidelines to GPs for reporting private equity fund data, covering key areas such as fund performance, cash flows, investment valuations, and fees. Invest Europe’s template is widely recognized and used across the European private equity ecosystem, promoting consistency and best practices in reporting.

How do the ILPA and Invest Europe reporting guidelines help fund managers and private markets investors?

Both ILPA and Invest Europe’s reporting templates aim to enhance transparency, comparability, and efficiency in reporting across the private markets landscape globally, benefiting both GPs and LPs.

• Enhanced Transparency: By standardizing reporting practices, these templates allow LPs to gain deeper insights into fund performance, investment strategies, and fee structures. Enhanced transparency fosters trust and confidence between GPs and LPs, laying the foundation for long-term partnerships.
• Efficiency and Consistency: Standardized reporting templates streamline the process of data collection, analysis, and distribution for both GPs and LPs. Instead of grappling with varying formats and terminology, stakeholders can easily interpret and compare data presented in a consistent way. This efficiency saves time and enables more meaningful discussions around fund performance and strategy.
• Facilitation of Due Diligence: Consistent reporting enables LPs to conduct apples-to-apples comparisons between different funds, assessing performance, risk factors, and operational metrics more effectively. This standardized approach makes due diligence processes more rigorous, enabling LPs to make well-informed investment decisions.
• Alignment of Interests: When LPs have access to clear and comprehensive data on fund performance and operations, they can better evaluate the alignment of the GP’s incentives with their own objectives. This alignment is crucial for maintaining trust and maximizing value creation over the investment’s life cycle.
• Adaptability and Evolution: ILPA and Invest Europe’s reporting templates are not static documents but evolve over time to reflect changes in industry best practices, regulatory requirements, and stakeholder feedback. This adaptability ensures that the templates remain relevant and effective in an ever-changing landscape, accommodating new developments and emerging trends within the private markets industry.

The alignment of interests between GPs and LPs is a cornerstone of successful partnerships in the private markets. ILPA and Invest Europe’s reporting templates play a pivotal role in promoting transparency, efficiency, and alignment of interests within the industry.

Want to learn more about Quantium’s ready-to-use ILPA and Invest Europe report templates? Get in touch for an introductory call and demo to see our award-winning report building software in action.