June 17, 2017
In one of our prior whitepapers, Drivers of Investment Returns: Value Creation Analysis Improved, we noted that the methods used to evaluate a GP’s investment strategy have evolved less quickly than the strategies themselves. The complexity and sophistication of private markets exceed many of the analytical processes that underpin them.
A similar lag exists when onboarding investors during fundraising. As the documents required to raise capital have grown more extensive, the process for absorbing and verifying the requisite information remains antiquated and tedious. Having invested with and alongside hundreds of GPs and worked to streamline our subscription and onboarding procedures, we can attest to the unnecessary cost and complexity of the process.
GPs ask myriad questions to verify a LP’s eligibility—a subscription booklet alone can exceed 50 pages. Even after this ordeal, an LP may need to be reminded to provide missing information, correct errors or provide tax forms and other supplementary documents. With hundreds of managers coming to market each year, it is unsurprising that the documents collected differ from sponsor to sponsor. However, the information GPs collect and their reasons for doing so are virtually identical. Though minute, these differences require LPs to repeat themselves needlessly.