How to Select the Right Portfolio Monitoring Software with Every Stakeholder in Mind

Portfolio monitoring software systems have become a vital lifeline for private equity firms of all sizes and specializations. While the value of implementing this software has been proven, many firms still find themselves searching for the right software provider and don’t know where to begin.

When choosing a portfolio monitoring software, it’s important to consider and anticipate the needs of each stakeholder within the firm. While the firm may be too small or resource-constrained to rationalize setting up a formal “buying committee,” it’s critical that everyone’s voice and needs be addressed in the purchasing decision.

When doing diligence on a prospective transaction, private equity professionals will have lots of differing questions and opinion based on their prior experiences or industry expertise. The process of choosing a portfolio monitoring software can be very similar in that various individuals and groups of people will bring their unique perspective to the table.

In this article, we analyse the most important features that firms should look for in a portfolio monitoring software platform, based on the firm’s unique stakeholders, their specific purposes, and desired outcomes.

1. Financial Controllers and Directors:

   This is the group of professionals who are responsible for inputting data into the system, and ensuring it is up to date and accurate. This group subsequently uses the data to analyse and report on the portfolio performance. Because of their specific role and interaction with the software, they will be best served by portfolio monitoring software that is easy to use and accessible wherever and whenever dealmaking and portfolio company initiatives occur.

2. Investment Directors and Senior Partners:
   This group of professionals will consume the data and information produced by the portfolio monitoring software. No matter if reporting is performed daily, weekly, monthly, quarterly, or annually, these professionals require access to accurate data that is formatted into easy-to-understand dashboards, data visualizations, and presentations. Ideally, the portfolio monitoring software system the firm chooses will allow the group to access pre-formatted reports that are flush with up-to-date data and proprietary insights.
   
   
3. Investor Relations and Limited Partners:
   This group requires increasing detailed reports and data analysis. They will require that the portfolio monitoring software provide them access to environmental, social and corporate governance (ESG) data as well as operational insights. Of course, all of this is on top of the more standard financial reporting that this group has come to rely on. Other considerations the investor relations and limited partner stakeholders may have include industry-specific insights, executive leadership changes and/or initiatives, fundraising, value creation, and other portfolio company-level or fund-level concerns. As such, the portfolio monitoring software your firm chooses should be able to report on all of these areas of focus from both the micro- and macro-trend perspective.

If your firm is considering purchasing and implementing a portfolio monitoring platform, it’s extremely important to involve all of the appropriate stakeholders in the process. Making unilateral decisions, or not properly considering the unique needs of different groups within the firm will only lead to low user adoption of the technology or a perceived lack of return-on-investment.

At Untap, we’ve made the portfolio monitoring software purchase and implementation process easy for private equity firms and other fund managers. Contact us today to learn more about our technology and how it addresses the needs of firms and their unique stakeholders.