Reinventing LP Transparency with Investor Reporting Automation

Tough macroeconomic conditions, and rising costs have slowed the flow of capital into private markets. Fundraising’s plateaued, and competition for LP commitments is fiercer than ever.

Performance still matters, but it’s no longer the only metric LPs care about. Increasingly, they’re focusing on how GPs handle investor communication, reporting, and transparency. For managers, that means either evolve your reporting model – or risk being left behind

After years of consistent inflows, private market fundraising is showing signs of strain. Preqin data revealed that aggregate capital raised in 2024 fell by almost 25% compared to the previous year.

Returns haven’t collapsed, but GPs are contending with an array of challenges: high interest rates, tighter lending terms, inflation, US tariff risks, and valuation pressures. All of which are making it harder for GPs to complete deals and exits and ultimately realise LP distributions.

The shortfall is becoming increasingly visible. MSCI data shows that Net Asset Values (NAVs) in older private market funds – those beyond the average liquidation age of thier asset class – are hovering around $250 billion as of Q4 2024, as the number distributions continues to tumble.

I’ve seen firsthand, LPs are not getting the returns to make new investments because GPs are struggling to sell their portfolios at the right price. It’s forcing GPs to hold onto their investments for longer, which means there’s less liquidity in the market. Some LPs are even asking GPs about how quickly they pay out distributions ahead of awarding mandates.

Compared to public markets – where automated reporting is the norm – private markets still lag behind. Too often, GP reporting is manual, slow, and difficult for LPs to access or analyse.

In many cases, reporting standards feel stuck in the 2000’s. Some managers have replaced fax and email with basic investor portals, but most still rely on static PDF reports. These file dumps may tick the compliance box but add little value for LPs, who need timely insights to make informed decisions.

And the stakes are high. With 18,000 funds competing for just $3.3 trillion in LP commitments (Bain & Co), differentiation is everything. Many of today’s decision-makers are younger, digital-native professionals. They expect intuitive dashboards, instant access, and personalised insights – not hours spent searching through outdated documents.

For institutional investors, inefficient reporting is frustrating. For tech-savvy retail investors – an increasingly important source of capital – it’s simply unacceptable. If ever there was a moment for private market managers to overhaul their reporting and LP transparency, it’s now.

So, what does better actually look like? LPs are clear about what they want:

• A complete view across their funds, strategies, and geographies.
• Real-time reporting that tracks performance and risk.
• Interactive dashboards with clear visualisations and benchmarking tools.
• Audit trails and transparency they can trust.
• Automated investor reporting that’s easy to access and simple to digest.

In short, LPs expect the same kind of seamless, digital-first experience they already enjoy in other parts of their financial lives.

Strong reporting starts with strong data. If the underlying data is incomplete, late, or inconsistent, then the reporting will inevitably fall short.

As Iain often emphasises, GPs must prioritise timely access to accurate data and complete data and ensure it’s validated before sharing it downstream with LPs. Historically, this has been challenging. Data often lives in silos across teams, spreadsheets, or multiple asset servicers. But technology’s changing that.

In recent years, advances in cloud infrastructure, machine learning, and natural language processing have made it possible to automate investor relations workflows and deliver accurate insights at scale.

Forward-thinking managers are already adopting new solutions that:

• Automate data ingestion and reconciliation from administrators.
• Standardise and enrich unstructured PDFs and statements.
• Implement API-driven investor portals to deliver interactive, real-time insights to LPs and internal teams.

By embracing these capabilities, GPs can transform private equity investor communication, differentiate their offering, and create meaningful value for LPs.

The private markets fundraising environment has never been tougher. Institutions are more selective, retail investors are on the rise, and expectations for transparency and experience have reached a new high.

Manual, PDF-based reporting no longer meets the standard. To remain competitive, GPs must embrace investor reporting automation and modernise their approach to LP transparency.

Those who do will be well-positioned to stand out in a crowded market. They’ll reduce friction, build trust, and unlock stronger LP relationships – transforming reporting from a burden into a competitive advantage.