Have yesterday’ s challenges provided a foundation for tomorrow ’ s success? 2 0 1 7 G l o bal P r iv at e E q uit y Sur v ey in c o l l abo r at io n w it h P r iv at e E q uit y I nt er nat io nal
W e w ould lik e to express our apprec iation to the 1 0 3 private equity C F O s w ho of f ered us their valuable insights and observations. In this report, w e to i op ation in o
nti
o p i at li
t
ci ion a t
uit fi in ig t continu to
can u t
ap t
ill a i t ta lop t
ol i
i utu in
a ing
lu p int o
ucc
Contents Executive summary
2
Blueprint for success
4
Building to last
10
Data and digital
12
Employee retention
18
Outsourcing
22
Investor communications
26
Protecting your business
30
Background and methodology
36
Investor insights
38
Other market data
44
EY contacts
48
Private Equity International contacts
50
E x ec ut iv e s um m ar y hat ha e firms one to stay competiti e
Have yesterday’ s challenges provided a foundation for tomorrow ’ s success?
at a
ou on to
co p titi
67% 62%
T he raw materials are in place
55%
n i on ntal p u o t pa t a a oc fi to icat ignificant ou c to non in t nt lat ta uc a gulato po ting an inc a in to po ting c all ng an ti l t oug inc a i ing a ll a i pl nting a lin t c nologi to al it t n gulato ui nt an inc a in to u t a ult a put t a at ial in plac to allo t to al it to o o c all ng
55%
it n o capital o ing to p i at uit un in to a ing inc a returns and even higher levels of servic e. In an industry ripe f or disruption there is inc a ing p u on p i at uit fi to a n an anal z po t olio co pan ata in a a t at ill n fit in to u tion t n co o o p i at uit fi o pa t t a c all ng uil upon to a oun ation an c at t fi o t utu ou a t i ou ou t annual lo al i at uit Su ou ll t at alt oug t continu to a ig an o t tu n p i at uit fi can g n at co t cti op ation t oug anaging tal nt an auto ation a ll a t a ilit to an po t olio co pan ata a co ing c itical to t ucc o a p i at uit fi u o t at t a at ial a no in plac to lop t n loo op ating o l o a p i at uit fi c all ng no i to a t t at gic ci ion ui to uil t opti u op ating o l o to o o p i at uit fi u u al t at li t at t a a a an t a t i t a o po ional taining an loping tal nt a an l ag t c nolog to c at tt in t nt oppo tuniti an auto at an o t ti con u ing anual p oc n an a ucc in t utu ill p n a uc on a l op ational fici nc a g at i a an inno ati t in ing
W h at s t il l needs t o t ak e p l ac e t o be c o m p et it iv e in t h e f ut ur e H iring talent
at ill ou o to 51%
Improved investor reporting
R egulatory c omplianc e
co p titi 50 %
in t
R etaining talent
utu
48% 40 %
T he challenge
2
n t cu nt n i on nt in fi cau o t tu n t l l o p o anc t fi
| 2 0 1 7 G l o bal P r iv at e E q uit y Sur v ey
to a a c ing o i l an tu ning to p i at uit a g n at i to icall n o to continu t i u t ocu on fici nt an co t cti op ation
R etaining talent
Improving c ybersec urity
Automating manual proc esses
D ata management
a c itical l nt to t i ucc an fi a a opt l a ing t c nologi to lop a an co t cti t o to anal z po t olio co pan ata i n t la g a ount o po in t cto t ata anal tic t c ni u a co ing essential to identif ying and c losing deals. a i ntifi t pa ticula t at gi to tac l t con t aint fi tl t at gic ata t c nolog an u in p oc auto ation po t olio anal tic anag nt po ting ata a ou con l tal nt anag nt ngaging t aining an c uciall taining t o t p o i ing tal nt an t i l out ou cing non alu a unction to ualifi ic p o i c all ng to i u ing t i cu nt ou c to uil to o o p i at uit fi op ating o l D ata and digital anag a t a con tantl in ting in n t c nolog olution ic a not t p o i aning ul fici nci o p i at uit fi an till l on ol a ion p a t a t n olution ui tail cu to ization an cu ntl lac t i ilit to a u t to n u in ui nt in t nt to date has been largely tac tic al in nature, to deal w ith operational c hallenges related to in to u t co plianc an gulation a oppo to ing pa t o an o all t at gic long t olution i a ta t to in t in t c nolog to anag t ug a ount o ata t n to p oc i inclu u ing n p og a in po t olio anal tic to ta a antag o in t nt oppo tuniti t at a not a n con i in t pa t igital plat o uppo ting tt co unication t nt fi an t in to an inc a auto ation o outin p oc o a ptical o a on iz fit all t c nolog olution t a not t n i nc t at suc h a thing exists. T alent a fin ing it inc a ingl i ficult to ngag an tain tal nt p ciall ill nnial o oti ation t n on a g n ou ala an ca lop nt oppo tuniti in t a t at t i p c o i not in t p c nt o p ct n i to ta o l t an fi a ic a loping tal nt i ficult an t logic in it u tiona l i at uit continu to o att acti i u nt an progression opportunities but no longer holds the allure or the gravitas that other younger, t n i cto o lt oug p i at uit can till att act ig t oti at g a uat t a no long co itting to a a ca it in t in u t ill nnial cl a l a pi to a oa o li alanc t an p iou g n ation an o a
cogniz t i att building events.
pting to on
it t
i
oung
tal nt t oug
ocial an t a
O utsourcing ut ou cing a ini t ati an tactical ta i ntifi a on a a t at t can u to ignificantl i p o t fici nc o t i op ating o l ing up ta to p n o ti on anal zing po t olio oppo tuniti an in to lation a conc n t oug a out t a ilit o n o to li con i t ntl ig ualit ic an o t op u o ig tu no an t i u in o l can a t in ntl l co itt to t ucc o an in i i ual cli nt t an a p i at uit fi o n plo o cogniz t n to a out ou cing o i a ac i ca ull l cting t ig t n o n gotiating a a t ag nt an t n anaging t t nal coll agu n o ca ull t an t i o n plo F inal thoughts gin t no ou t t at t i ficult an t i u a ci c all ng o a atu ing in u t a iou t pa t a inclu ing an unc tain co p tition o al ig t n in to lo an t act t at t a o fici nc al o a to con i olution ui to i p o it a a co p titi gulat n i on nt o
p i at uit u in i co ing o t acing a t cla ic t at gic acto a inc a t i u no cono ic n i on nt un l nting p u to p o i inc a ic at a a onl all gain in op ating t t i cu nt op ating o l an t to an l t c all ng t at fi ac in a
i ing t l on l a n o t pa t a t a i i top o cti po ing t to tac l t co pl an acing t a oping t at a co ination o auto ation an tal nt anag nt ill t to ocu l on outin financial po ting an p n o ti on o ca analysis, w hic h adds strategic value f or all relevant c onstituents. t
ntifi i fi na l ting an
t li t at ot anag an in to no at tool a ui o private equity f unds to navigate the c hallenges w hic h lie ahead in this unc ertain global cono ic n i on nt an loo o a to continuing to p o i in ig t an anal i ac o t oa a t anag nt in u t inclu ing t p i at uit a t
2 0 1 7 G l o bal P r iv at e E q uit y Sur v ey
|
3
Blueprint for success 4
| 2017 Global Private Equity Survey
2017 Global Private Equity Survey |
5
a o
cti
to
cl a l i n
ntifi
o
ain ucc
t
top op ating
t
n tt o
ul in t
co p titi
a
I m m ediat e ar eas o f f o c us
private equity industry. T ac tic al solutions have previously been put in plac e to deal it inc a
in a
t un
gulation an in loo ing
a
to i
t oug
u t
ntifi
ocu on op ation i co p titi
anag
to
anag
a t ing ata
ain nt
loping t
po ting
top t
ou top op ating o
55%
fi
p opl an auto ating outin p oc na t
at a
a
cti
t at a t at gic
ui
p o ing
o
W h at ar e t h e t o p o p er at ing o bj ec t iv es in nex t t w o y ear s
nt
53 %
a
45%
op ating i p ati
T hese strategic f unc tions are c ritic al f or C F O s to un
tan to a in o
to i pl
nt
3 5%
new proc esses, to potentially inc rease returns, uc
p n
an p o uc in o
ation
o
27%
ac c urately and expeditiously in the f uture.
a
all loo ing o
fici nci
in ata
gathering and its c onversion into usable and
6
actiona l in o
ation
| 2 0 1 7 G l o bal P r iv at e E q uit y Sur v ey
Improving management reporting
D eveloping personnel
Automating operations
S ystems investment
O utsourc ing
D Wr ivh at ing c o m p l ex it y ar e t h e c o nt r ibut o r s t o o p er at io nal c o m
a
p l ex it y in t h e nex t t w o y ear s ?
i
ntifi
a nu
o cont i uto
op ational co pl it in t
a ount o in o
n
to
anal z
to
gulation an inc a ation t at outin l
an cu to iz
in
to
requests all pose their ow n c hallenges f or C F O s
at cont i ut
o t to ou fi
co pl it
to na igat n
64%
t at gic c all ng
a
anaging co in pan ing in
t
itional p
u
a
50 %
long it t t
tactical c all ng a
ging uc
nt oppo tuniti
nt t at gi o
an
c ating
an t
i t a
D ec iding how to alloc ate resourc es appropriately
49%
to
al it t
i
i i po tant o i pl
o co pl it to con i
nting n
p io to
t at gi
28% 24%
R egulation
D ata management
Inf ormation requests
C o- investment demands
E xpanding investment strategy
gulato t a
a
n i on
a ac ing t o
nt continu
it al a a a
to
n ut
u fici ntl
2 0 1 7 G l o bal P r iv at e E q uit y Sur v ey
|
7
a ing
alt it a ignificant inc a
gulato on
an
an
pon ing to p cializ u t
o
li it
in
p ctation
oug t
in o
ation
pa tn
F inanc e ex ec ut iv es w ant t o c o nc ent r at e o n t h e big p ic t ur e. . .
have expressed a desire to shif t their f oc us o to
t
i pl
o
o
t at a
ntation an
a
a to a ta
loo ing an
alu to t
g o t t a cto
o t
o ganization
a
loo ing to inc a
ti
t
nt po t olio anal tic
p nt on in ic tt
ill na l t in
t
o ganization to
nt
ci ion an i
o
oul
ou c ang t
allocation o
ou ti
Ho w w o ul d y o u c h ange t h e al l o c at io n o f y o ur t im e in t h e nex t t w o y ear s ?
t at gic ta t
P ortf olio analysis
Investor relations
T ax
R egulatory
V aluation
13 %
12%
10 %
T ec hnology
T reasury
F und H uman ac c ounting resourc es
a
nti
alu
c reation opportunities, as w ell as w ork ing w ith in i
to
lation to
ntiat t
lp t l
un ai ing n i on int n ifi
i o ganization
nt
a
op ational u
p o p cti
anag
op ational a a
25%
ilig nc on il
ill
3 6%
in a co p titi
gulato
an
ain a ignificant pa t
of the business, C F O s hope that their f oc us on t o
ac
a
loo ing a a
ill an
3 %
3 %
10 %
11% 20 %
8
Inc rease
| 2 0 1 7 G l o bal P r iv at e E q uit y Sur v ey
D ec rease
7% 5%
5% 4%
3 %
2% 10 %
18%
and al ign t h eir t eam s t o s h ar e in t h e r es p o ns ibil it y
n it co t
allocation o t
T ax
R egulatory
V aluation
to
on a a
t
ti
i t a
uc a in
F und H uman ac c ounting T ec hnology resourc es
to t
T reasury
t
t at gic i ction o t
o t l
pon
ti
in
nt
ant
t
8%
to p n
co plianc an
ic a
p i a il co po
outin an
u i
alu to t
o
nta a
ta
an o
i ction o t
un o littl
o ganization
gulato l
co plianc ll to
ntation o t c nolog
solutions.
12%
8%
6%
2%
ti
o ganization i t a
gulato
out ou cing an i pl
14%
o
nt po t olio anal tic
unctional a a al o l n t
15%
ocu i
p n ing
un accounting an
3 8% 21%
t
investor relations and other areas that add value
accounting
4%
i t a
to
w ould lik e to align their ow n attention. C F O s
ou ct h ang Ho w o w o ul doul y o u c h ange e al l o c att io n allocation o f y o ur t eam o ’ s t im ou e in t th eanex t t tiw o y ear s ? Investor relations
oul li
c onsistent w ith the desired shif t in w here C F O s oul li
P ortf olio analysis
to o t
8% 11%
4% 4%
2% 14%
27% 3 4%
Inc rease
D ec rease
2 0 1 7 G l o bal P r iv at e E q uit y Sur v ey
|
9
Building to last 10 | 2017 Global Private Equity Survey
2017 Global Private Equity Survey | 11
i at uit fi continu to in t in t c nolog partic ularly in relation to portf olio analytic s, to handle large a ount o ata gulato co plianc an an in to u t i in t nt a a c all ng to i pl nt due to the uniqueness of private equity f und struc tures and a t to a aning ul fici nci o t o all u in op ation co t o i pl nting an aintaining t olution an t aining plo to co co p t nt u ing t i till a a o pot ntial co t to un anag o ticall t olution coul p o i aning ul tu n an fici nci to un anag onc t at gicall i pl nt ut o t a t a ntt t n o tunat l t a t on iz fit all t c nolog olution t at anag a loo ing o o not to i t t
D at a and digit al 1 2
| 2 0 1 7 G l o bal P r iv at e E q uit y Sur v ey
C an t ec h no l o gy s o l v e t h e bigges t p r o bl em s Q 23
i
ou n
gulato
ol
n i on
nt i a co
co pl
t uctu
t in t c nolog
n
op ating
ination o ol c all ng lianc on p a
co poun
to in
t
an p o uct l gac
ill an an o
T ec h no l o gy D r iv er s
at
n a po t
t
a
t
itional u
n
of regulatory reporting, c ybersec urity and investor expec tations of low er f ees and inc reased transparenc y.
90 %
a
al o loo ing to p n
alu a
on
to
lation anual
i not
olution
t
uc a in
ti
an po t olio anal i Scaling t oug p oc
65%
acti iti
o
n a a ia l long t ia int nal
t
o
the tec hnic al c apabilities of third parties, tec hnology is the best option to deal w ith the
45%
new operating reality.
43 % 3 0 %
i n
t
ou c
a
an in
to
op ational i
n
to g t ll a
o
up ti
o
o anal i
lation it i n t a u p i fici nc top t
o t c nolog in
t
i ting t at li t o
nt to cal
ef f ec tively, w hile dealing w ith regulatory po ting in
O perational gulato fici nc requirements
Investor p ctation
F und co pl it
to
an
an co pl it
G row th
2 0 1 7 G l o bal P r iv at e E q uit y Sur v ey
|
1 3
n
t at g to
i pl
al it co pl it
nting on
olution
top
po i
olution o accounting po t olio to
o
lation
n
op un accounting
n o tunat l t
an in
a
o a ingl anag
nt
are not providing the c apabilities required to replac e spreadsheets. W hether real or perc eived, t
W h y h av e s p r eads h eet s no t been r ep l ac ed by m o r e s o p h is t ic at ed s o l ut io ns ?
ain un ulfill
cial ac o fic an accounting olution
li
Sp r eads h eet s h anging o n
co t an co pl it o
cu to ization an lac o agilit to
ui
a nt p a
t
n
plac
it n
t
79%
pon
to business c hanges require c ontinued use of spreadsheets. co t o
l ing on p a
t
58%
a a t ic l
dow n ef f ec t on dealing w ith the c hallenges of
50 %
regulatory reporting and investor expec tations. a ilit to o
po t accu at l an
ug conc n
l o t
o
fici ntl i ai t at
3 3 %
the use of spreadsheets as data sourc es w as their top ata
anag
nt conc n
L ess c ostly and c omplex
1 4
| 2 0 1 7 G l o bal P r iv at e E q uit y Sur v ey
Better i ilit
a i to support
G reater transparenc y
22%
22%
E ase- of - use
M ore int g ation option
Har nes s ing dat a is r ap idl y dev el o p ing as a m us t h av e c ap abil it y
placing p a to tal to ac ot
ol
in
a
t
po t
gulato
no
po l
o l t i i not a uni u
non
gulato
ting in ata
ll fi
an in
a to
ac
t
atic
it
po ting
fici ntl an accu at l
81%
t
are look ing to data solutions to solve. In a p
atD atc aall C h alng l engescoul
t an g tting
i
ui
t an
nt
ui
oli tic an int g at
t at p a
ting a
app oac
ilo
t
t op o l
a
cannot
provide. lti at l t
64%
o
n
ing to
acti it
o
anual ata nt
in icati
non alu a an
po ting
via spreadsheet are not an ef f ec tive use of ou c
41%
an
3 4%
ocu ing
oppo
3 2%
27%
o ing t i oppo tunit co t to
cti
plo anuall co
a to
inc a
in
on anal zing ata a
to
ining it i a
anag t
u in
o an
ati action at t
a
ti
providing a rew arding prof essional experienc e o
R eplac e spreadsheets
Integrate systems
Improve data quality
L everage existing system
Better data governanc e
Improved audit trail
plo
g t
po t in all in
po t olio co pani coul
all iat
lin
po t to t
o o
lot o i
at
uplicati
u t a on un
o
ou o
ou c t at
l ing ata
2 0 1 7 G l o bal P r iv at e E q uit y Sur v ey
|
1 5
T ec h no l o gy inv es t m ent t r ends
C F O s still believe in tec hnology as the best w ay in w hic h to deal w ith the c hallenging op ating n i on to a t
ata
nt ut
nt
t
a
loo ing
i n olution to
i o ganization anag
an a lp
anag
o t olio anal tic an
po ting olution a ing to
a
cl a l tt
ci ion
around their portf olio and operations. T his c an al o p o i
alu a
on t at
cti
t i cl a t at t into a
in ig t to t
a
t c nolog
t o olution
po ting a ing a t c nolog
on t
ill t c nolog
o
l a
ol
inv es t m ent s ?
ac o fic
44%
41%
40 %
nt
app oac to l
42%
to
anag
to uit fi
W h at ar e t h e t o p s y s t em
ip
accounting in
po tal po t olio anal tic an i allo ing p i at
an
W hat has been your tec hnology f oc us during the past tw o years and w hat ill it o t n tt o a
3 3 %
3 3 %
ag
27%
un o t
uc a accounting
t
3 4%
3 3 %
an
25%
regulatory reporting are still needed but the i t in in
t
nt
ignal t
a opting an anal tic o
in
int llig ntl ac o
in u t
i
t to cal an op at t
ont
i
l an
ac o fic
t in t
onl
t oug t
u
ocu o i
1 6
a to ucc o ot a
ull
cal i
o t at going to
on t t in t o ing unli it
i going to
t
ig t an
| 2 0 1 7 G l o bal P r iv at e E q uit y Sur v ey
M anagement reporting
P ortf olio analytic s
Investor portal
P ast tw o years
F und ac c ounting
N ext tw o years
R egulatory reporting
D at a and anal y t ic inv es t m ent t r ends
i
a
loo ing to i p o
t
i anal tic
c apabilities and are c learly investing in the tec hnology by building data w arehouses and i pl
nting anal tic tool
att
Q 26
W hat has been your data f oc us during the past tw o years and w hat w ill it be o t n tt o a 46%
45%
43 %
pt to g t ata out o p a
ata o
D at a inv es t m ent s
i i an o
i pa at
t
iou
t co
an i p o
in
t
ata ualit o inco pl t o incon i t nt ata sets. c nolog i on pi c o t
45%
t o a a o in
t
ata puzzl
nt t at co
lo
t
in our survey are hiring data talent and data go
nanc
ot in
ting in t
p opl an
proc esses needed to support expensive data an anal tic
28% t
19%
19%
i
15%
14%
ata an
anag t
i
ting up ont in ata go
an
in
T axonomy
T alent
G overnanc e
co tl
o
nanc an
ata
c leanup ef f orts. T he right people and proc ess w ill ac
T raining
olution i c itical
finition can a
lp fi
Analytic s
ing
the right people and sk ills to ef f ec tively use
14%
W arehouse
i
p ctation an lo a option po
23 % 18%
olution coul l a to
a oi
on
n it co
a anag
t p o to t
con tantl nt an
i
a
ata initiati
i iting ou a
t o t p
g tting
ata tt
ac
and every year, but w henever w e push on one
P ast tw o years
N ext tw o years
a p ct to g t
tt
anot
all apa t
2 0 1 7 G l o bal P r iv at e E q uit y Sur v ey
|
1 7
E
mployee retention is a major challenge for CFOs as they attempt to optimize their operating model. As we know, there can be large costs associated with training and developing talent. As a way to combat attrition, many firms now try to lure employees to stay with opportunities for further professional development. It is important for CFOs to engage more effectively with their talent so that they choose to stay for an extended period of time in order to create operational efficiencies. Another challenge facing CFOs is that millennials are more apt to change jobs than any other previous generation. Engaging and retaining millennials is a major focus of most firms regardless of their industry. If CFOs can effectively engage their younger staff and allow them to assist with strategic implementation of new processes, benefits can be seen by both parties.
Employee retention 18 | 2017 Global Private Equity Survey
18
B uil ding t h e ideal w o r k f o r c e
continu to t
ocu
on i p o ing
u an capital po tion o t it t
p oli
ating
i
u t an
p ctation continuall plac
e c ur r ent and f ut ur e w o r k f o r c e p r io r it ies ?
int nal an
W hat have been your w ork f orc e priorities during the past tw o years and w hat ill t o t n tt o a 79%
anag co
nt t a
ounting
on fi
t nal ta
ol
gulato
a no u p i
u in
t at t
g an
it
ocu continu
to be on inc reasing headc ount and attrac ting t
t an ing to g t
ig t t o
plo
il
out o cu
nt
plo
T he f oc us on retaining good talent c an c learly
67%
ai to o o plo
p i at
uit fi
ac ui ition co t
ot
ucing on ta
an
p o uction i
49% 45% 45% 41% 3 3 %
17% 10 %
Inc rease produc tivity
Better quality hires
Inc rease headc ount
P ast tw o years
Improve retention
12%
D ec rease headc ount
N ext tw o years 2 0 1 7 G l o bal P r iv at e E q uit y Sur v ey
|
1 9
it t
conc pt o li ti
la g l
a ing i app a
nacula to
p c nt o
tain cu
gula in t
to a it in fi
at att ition t
n on p o i ing
plo
it
ocu ut
prof essional grow th opportunities and tec hnic al ill
lop
o
plo
nt
il t
to loo to n
U nder s t anding w h Hoatw l o ngm w ilill m l ilennial w ant l ennial s s t ay ? s
o
nt tal nt plo
o ganization
a a to co
a
ou
gun to ocu
p ct
on to ot
a
o
a
on initiati o
plo
t n
a
n
o ganization
to satisf y their need f or new c hallenges and
o long o ou ill nnial to ta
p ct
8%
< 2 years
Q 18
2 to 5 yearsretention? oes your firm consi er the following to be an important component Chec all that apply > 5 years
other roles and responsibilities, C F O s are now
70 %
seeing the value in c reating opportunities f or plo cu
to fin t
nt p i at
i n t o
it in t
i
99%
o o ou plan to tain ill nnial
uit fi
22%
83 %
61% 53 %
t in i plo
ou
illing to in ou can
t in
all g at
19%
pt
P rof essional grow th opportunities
2 0
| 2 0 1 7 G l o bal P r iv at e E q uit y Sur v ey
T ec hnic al sk ill development
T ransparent c ommunic ation
S of t sk ill development
F ormal mentorship programs
A l l em p l o y ees w ant a bet t er q ual it y o f l if e
na
ition to p o lop
ional
nt
a
n fit t at
onat
pa t
plo
plo ing an inc a
it
n fit
plo
at
n fit a
o
to ou
an
plo
ical
i t in t
n fit
t p
plo
Q 16
ult to
Current uality of life benefits offere
o
o o
nt
p i a il
on co p n ation acation an
t o
ocu
a iou t
n fit t at a ocu
n fit t at a
in t
alt a
na
alu
o
on financial
a po iti
i pact
on quality of lif e. C F O s are c urrently f oc used on i pl in
68%
t l
63 %
co
nting initiati
aintaining a it l at an a
t at a i t t
i l an
a il
plo i n l
t uctu
n fit
itional co t to t
co pan
o o
48%
3 2%
P aid parental leave
W ork ing remotely
F lexible w ork ing hours
L imited business travel
20 %
19%
R educ ed overtime
M obility opportunities
2 0 1 7 G l o bal P r iv at e E q uit y Sur v ey
|
2 1
I
n a perf ec t w orld, outsourc ing w ould provide all of the answ ers t at un anag a loo ing o putting t u no anaging an taining tal nt anaging t op ation o t u in an a ing cala l g o t painl onto a t i pa t n o o out ou cing capa iliti o t p i at uit in u t a not n a l a atu o pl nti ul a t o cu ntl a aila l to utual un an g un n all nco pa ing t c nolog olution o not t i t to al it uni u it suc h as valuation, portf olio analytic s and the related investor u t ut ou cing p o i a to al it an n gati p c ption t at a t to o co a ia l out ou c ic p o i i t it oul a u an o t int nal p u cu ntl ing p i nc un anag na ling p i at uit fi to o ull conc nt at on c ating tu n f or investors.
O ut s o ur c ing 2 2
| 2 0 1 7 G l o bal P r iv at e E q uit y Sur v ey
F unc t io nal v iew
a t
a o it o fi
cu
ntl out ou c
at least one f unc tion. T ac tic al f unc tions suc h as f und ac c ounting, tax and tec hnology c ontinue to
Q 13
o ou cu
ntl o plan to out ou cN
t
ta
o t out ou c
unction to t i
pa ti
ex t t w o y ear s
ago Suc tactical unction al o continu to top can i at
o
n t out ou cing
p o ct St at gic unction 2 0 %
Q 13
till
Y es
ing co pl t p op l
ac 8 0 %
t
in ou
a fi
on t
ult a
unction co pa a
ti
con i t nt ac o to t o
in icat t
a
ago
t
o not t in
outsourc ing is a true option to suc c essf ully
63 %
handle all the strategic f unc tions that private uit fi
53 %
52%
aluation
c onsider third parties as being able to handle t
68%
uc a
portf olio analytic s and investor relations are
N o
W h at h eadc o unt is c ur r ent l y o ut s o ur c ed and ex p ec t ed t o be o ut s o ur c ed in t h e nex t t w o y ear s ?
61%
ic i
c onsistent w ith our survey results tw o years
at a
t o
n
to
aintain cont ol o
unction
3 7%
25% 26%
23 % 23 % 14% 6%
T ax
F und ac c ounting
T ec hnology
R egulatory/ c omplianc e
H uman resourc es
C urrently
P lan
10 %
T reasury
6%
4%
Investor relations
5%
V aluation
7% 3 % Investment portf olio analytic s
t in t at out ou cing c tain unction i n c
a
cau
t
no a
can att act
all the dif f erent sk ill sets that w e w ould need to uppo t ou
u in
2 0 1 7 G l o bal P r iv at e E q uit y Sur v ey
|
2 3
an
t
po iti
i
c tain tactical unction
o out ou cing pon
nt in icat
ercei e benefits
that using an outsourc ed provider w ould inc rease t
a ilit o t
i fi
to an l
o
o
have better tec hnology c apabilities and c ould provide industry leading prac tic e. Interestingly noug to
allocating co t to t
an o
un
l ing po iti
i nt
acto
W h y o ut s o ur c e?
at o ou
a t
n fit o out ou cing
n
dec iding w hether to use outsourc ed resourc es. C F O s w ould lik e to use vendors to provide tac tic al
79%
servic es suc h as tax, ac c ounting and tec hnology,
68%
believing that if they c an leverage the c apac ity, industry expertise and c apabilities of external pa ti a
it ill allo t acti iti
to
t at ill
i t ti
66%
to alu
n fit all o t
i
c onstituents.
42%
26%
g tt p n t
t
ic o t ti
o
lation ip
2 4
t
it an
| 2 0 1 7 G l o bal P r iv at e E q uit y Sur v ey
n o uil
oli
Inc rease c apac ity
P rovide industry expertise
Better tec hnology
R educ e headc ount
T ransf er c osts to f unds
P er c eiv ed c h al l enges
C F O s also are c lear about the dow nside to out ou cing c tain unction
gati
perc eptions on outsourc ing are related to substandard servic e quality, an inability to
Q 15
anag co pl it an
R easoo nsout o o ut s ao urt c e con t aint to out ou cing at
S
ic p o i
n
ig
plo
tu no
to fin a a to tu n
around the negative perc eptions and get C F O s
79%
to t u t in t
an
t
p i at
n
o t
li
t at t
can an l
uit in u t
ot
that these c hallenges have suc c essf ully been o
68% 59%
co
in t
utual un an
in u t i
o
to o
in t
co
out ou c
t
g
i cl a l
un
till a u l
p i at
uit
pac
o
ic p o i
to
co
a ia l
option o fi
45%
3 0 % 19%
S ubstandard servic e level and quality
Inability to manage c omplexity
S ervic e provider turnover
i ficult to manage
R edundant c osts
Internal resistanc e
t in t ic a goo a
c all ng plo
it out ou cing i o
iou
a n t natu all going to
ou o n
plo
2 0 1 7 G l o bal P r iv at e E q uit y Sur v ey
|
2 5
Investor communications 26 | 2017 Global Private Equity Survey
o t u ulfilling u t o tailo financial po t a a a in ic t g n al pa tn a alu n an ai olling out an data portal w ill be one of their k ey initiatives over the next tw o a Su p i ingl o gi n t i g n al co it nt to p o i ing in to it all t ata t an p i at uit a a goo o to a a out t tan a iz po ting t plat un il t n titutional i it a tn ip ociation in a l So a t a nt n an po iti ult in t o l t o l co pl o t a ot an in to a a o it an t o o a a till a ing o t i ol cu to po t an a n t ult a a n o o o t g n al pa tn ut no a itional in ig t o t
2 0 1 7 G l o bal P r iv at e E q uit y Sur v ey
|
2 7
A r e inv es t o r p o r t al s being us ed t o t h eir p o t ent ial
C F O s have spent the last tw o years f oc used on in
to
po ting
po i
in
to
po tal
ua t
ocu
nt an
o t o not a
o
a
outin p oc
po t
plan
oti at
ia
on t i
to auto at
an i p o
fici nc
o
op ating
gulato
n i on
nt i
to stay and investors have higher expec tations. p o i ing a i
o
o u t igital
oppo tunit
igital p oc
ic anal tic an t
o
n
an tool l t
at i t i
to
a
6 3 %
uilt an
op n up an a
outin
at i to ata
i o n u tion igitiz
gulato
ocu
1 8 %
p oc
1 2 %
itional o l o auto ation nt to t a lin p oc
co plianc
nt
ocu
3 1 %
2 9 %
to enable elec tronic ingestion of unstruc tured ata o
5 6 %
5 3 %
Beyond solving the investor request c hallenge an auto ating t
7 3 %
in t uction o
at i acc t
4 %
1 2 %
8 %
1 5 %
2 8 %
1 8 % 1 3 %
nt c nt ic
provide an opportunity to reduc e the w ork load
2 %
O nline c ustomer servic e
Analytic tools
E lec tronic f orms and o o
Investor self - servic e
Ac c ess to f undraising materials
and the c ost of operations.
C urrent
| 2 0 1 7 G l o bal P r iv at e E q uit y Sur v ey
1 4 % 9 %
an
w orld of private equity operations this w ould
2 8
nt
8 4 % 7 4 %
nt a a i
nt an
to po tal not a cu n tt o a
8 4 %
l
o nloa ing
o coul auto at anag
o ou in nt o t
o can p o i
an
ing ata contact
o il
o
i op ation a oun o
p i nc a
o
auto ation
fici nci
at a t cu nt capa iliti capa ilit o ou plan to i pl
N ext tw o years
N ot planned
Ac c ess to c apital ac c ount and financial
Ac c ess to investor letters and doc uments
T h e I L P A t em p l at e
i at n
an
can
W h at p er c ent age o f inv es t o r s ar e r eq ues t ing I L P A ado p t io n?
W hat perc entage of investors are requesting adoption of the t plat
in t
a out t
t
n
plat
an
4 % 4 %
1 8 %
p
u
t p
D o not plan to adopt
F ull adoption
i
ou
lo a option o t a
t
c utin on
p i at
p o i ing n anc t
uit fi
to
a
n
i
o
t an pa nc to
nt to t
i o n p op i ta
a oppo
plat
onaliz
o t
A do p t ing I L P A ?
o c tain in to
plat
o not app a to
a pu
po ting
Q 20
nl
t
t an pa nt to t
t oug
7 4 %
a option
p n
the industry respond to the rec ent regulatory
1 0 % – 2 5 % of investors 2 5 % – 5 0 % of investors
o ifi
n lo to a opt t
c nt
p n o
< 1 0 % of investors
a
c at
conc n
> 5 0 % of investors
o ou fi plan to adopt the t plat
uit fi
na o
to a opting t
ition
t n to a
atting an
tan a iz
po ting
o ga l
po ting p o i
3 8% 3 3 %
18% 11%
otto anot a
t
lin i t
t
plat i u t
plat it i n t actuall
li inat an
itional o
2 0 1 7 G l o bal P r iv at e E q uit y Sur v ey
|
2 9
Protecting your business 30 | 2017 Global Private Equity Survey
W
hile larger firms have built out their compliance functions internally, many small firms still rely upon guidance from external advisors to address their regulatory and compliance requirements. CFOs argue that these advisors are better able to follow the latest wrinkles in regulators’ reports than they can in-house and that relying on an external advisor frees internal resources in ways that add more strategic value and improve employee morale. According to the CFOs we surveyed, many smaller firms have not been visited by the SEC in the past two years. However, we believe that trend will reverse given the latest views from the SEC with regard to their investment management inspection program.
2017 Global Private Equity Survey | 31
p n
allocation
gulato
ain on o t
an co plianc p io iti
top o t
industry. D ue to c ontinued regulatory pressure, an fi
a
gun to
plo nu
ou
E x p ens e al l o c at io ns m o v e f r o m im p l em ent at io n t o c o m p l ianc e
tac tic s to address the expense alloc ation conun u n anc p oc
pi a ocu
u
ocu
a
ntation an polici
o
n to an
it i po tant o t
Ho w ar e y o uW m anaging t h e been ex p ens eyour al l o c at fio ocn p us r o c esregarding s ? hat has
t o
a
an
at ill it
o
expense alloc ations during the past t n tt o a
industry to c ontinue to innovate and explore advanc ed tec hnologies to prevent inequitable t at
nt an inc a
t an pa nc to
65%
65%
47% 41%
42%
26%
24%
23 %
24% 16%
14%
8%
E nhanc ed doc umentation
N ew polic ies and proc edures
C omplianc e testing P ast tw o years
3 2
| 2 0 1 7 G l o bal P r iv at e E q uit y Sur v ey
V endor tec hnology N ext tw o years
M apping to investor agreements
In- house tec hnology
C y ber s ec ur it y is no w t h e num ber o ne r egul at o r y p r io r it y
C ybersec urity and expense alloc ations are at the top o fi
h at ar e t h
cu
fi
p o ct t at ocu on
nt n i on
c a
o int
o
t
nt
o
an
p n
n tt o
allocation a
t co plianc t ting an
on ict gulato
reporting w ere also c ited as higher on the priority li t it t o
72%
an co plianc ag n a
in t ill
W hat has been your top regulatory priority during the past tw o years and at ill it o t n tt o a e t o p r egul at o r y and c o m p l ianc e p r io r it ies
gulato
ini al p o ct a
lt oug t i
c ang o
t
pa t a
n t nt
w ere not partic ularly high priority in general, the
66%
fi
60 %
t
u n tt o
not a
an inc a li l a a
in ocu o ult o t
i
c ybersec urity c onc erns.
41%
45% 41%
42%
42%
3 9%
40 %
25%
27%
17% 10 %
C ybersec urity
E xpense alloc ations
on ict of interest
C omplianc e testing
P ast tw o years
R egulatory reporting
Alloc ations to c o- investment vehic les
T hird- party assessments
N ext tw o years
2 0 1 7 G l o bal P r iv at e E q uit y Sur v ey
|
3 3
C F O c onc erns about c ybersec urity are grow ing. t
n a co
cu
it
nt to
ata outlin
in t
cut t S
t p to
T h e r is k s o f a digit al w o r l d
gui anc on
c ybersec urityQ and 3 0 their ow n grow ing anxiety that t
financ
unction W h at ari pa e t ticula h e C y l berulns eca url
to attac k , private equity exec utives believe t at c
cu it i li l to
ain o
it y r is k s ?
ig
c onc ern f or the next tw o years. F lash trades, al a
an o
a
ultipl
o
t
p a in o
t
nt
uc a
i
a a
a
co p o i
nt an a anc al a
p
a
a ong t
i po t olio co pani t
an
in
t
a ong fi
nt
i financial account to t
to t
in
al a
46%
o
t ing t at t
continu to i p o
44%
28%
28%
25%
ut ou
a oun it onfi ntial in o ation l a ag
o po i ca pa nt n
3 4
anag
clou
24%
a il a o
nt
54%
an
3 1%
cu it i not n c
t
64%
at
o o a
i
ntial
o ca
anag
cu it
78%
ing i ila
ot at t
ig at
ai
i t nt t
conc n
conc n i lig t
continu to
po i ilit o confi
ation l a ag
anag
t
at a t o t p al nt c an to t po t olio co pani
| 2 0 1 7 G l o bal P r iv at e E q uit y Sur v ey
Social ngin ing al a o an o a t
nt
anag
t
i t nt at
o t olio co pani
o po i int ll ctual p op t
M anaging c y ber - t h r eat s
t
continu to attl t
c
cu it t
at to t
l ntl financial an
putational ta ilit o p i at an t
i po t olio co pani
a
begun or plan to begin c oordinating w ith the
firms Approaching Cybersecurity at portfolio companies?
o a ou cu ntl app oac ing c cu it co pani an o o ou plan to app oac t
i at ou po t olio in t n t t o a
po t olio co pani itigating
a o an
43 %
to a
fi
3 3 %
c
24%
u
t
o t popula
cu it conc n nt o
u
a
p
o
ing a
ilig nc p og a
a ing pu c a ing o p ocu cu it p o uct o
a
att
fici nt a ac o
co pani
to
ig t iz t
ic
pting to a
in a co t an
28%
c a
al int g at
al
on t
po t olio co pani
c
3 9%
a
nt
ollo ing a
a ing c
ac o
to i pl
a u
pa ticipant t t o
57%
3 7%
uit fi
nt o o
c t
cu it
i po t olio
uc unn c
a
i p og a
to
o
a tt
appropriate level of risk .
21%
V endor management program
S hare c yber assessments ac ross c ompanies C urrently
S hare produc ts ac ross c ompanies
P urc hases at disc retion of eac h c ompany
N ext tw o years
2 0 1 7 G l o bal P r iv at e E q uit y Sur v ey
|
3 5
Background and methodology 36 | 2017 Global Private Equity Survey
espon ent profile hat is your firm s total A
Ho w m any uniq ue inv es t o r s o you report to?
?
1 6 %
plu
i at uit nt national c onduc ted the researc h, c ollec ting in o ation t oug t ollo ing
2 6 %
plu
9 %
• T elephone interview s w ith 3 1 p i at uit un o ugu t t oug c
1 6 % 2 4 %
•
n onlin u to ic private equity f unds responded o ugu t t oug c
•
ll a ount in t u a unless otherw ise stated
2 3 %
1 3 %
2 1 %
2 1 %
1 4 %
1 7 %
t an
M et h o do l o gy
S
F or several of the questions, ultipl an allo resulting in responses that do not total
1 0 3 f unds
ica
8 8 %
International 1
2 %
2 0 1 7 G l o bal P r iv at e E q uit y Sur v ey
|
3 7
Investor insights 38 | 2017 Global Private Equity Survey
P
rivate Equity International’s fifth annual year-end poll of global investor sentiment finds LPs on understandably cautious footing. The global economic slowdown, persistent low interest rates and frothy market valuations have combined to create some jitters in the investor community. Investors are very focused on the economic terms of the Limited Partnership Agreement and securing a proper alignment of interest, particularly in the areas of fees and expenses. Many LPs still are hopeful there will someday be a standardized reporting template. The silver lining for fund managers is that the vast majority of investors are satisfied with the performance of their private equity portfolios and are planning to make new primary commitments over the next twelve months.
2017 Global Private Equity Survey | 39
i i
n
a
to
s
pon
fi
nt p ofil
Investor respondent headquarters
1 %
7 %
R espondent headquarters
P ension f und
1 0 %
8 %
6 %
W estern E urope
C orporate
3 7 %
N orth Americ a
F und of F unds
1 9 %
4 7 %
a il o fic E ndow ment or f oundation
Where have you committed capital?
ou co
itt
C urrent allocation position
capital
C urrent alloc ation position
P rivate equity
82%
P rivate real estate
62%
Inf rastruc ture
P rivate debt
M iddle E ast/ Af ric a
3 9 %
S overeign w ealth f und
2 6 %
a
59%
49%
P rivate equity
P rivate real estate
52%
43 %
Inf rastruc ture
P rivate debt
48%
57%
64%
51%
Under alloc ated
4 0
| 2 0 1 7 G l o bal P r iv at e E q uit y Sur v ey
ia acific
3 6%
49%
At target alloc ation
O perational changes in the nex t tw o years? How w ill amount of G P relationships change?
o
ill t
nu
o
lation ip c ang
P rivate equity
46%
P rivate real estate
3 6%
3 2%
n
nt inc a
in t
n t
ont 48%
C o- investments
18%
52%
t
16%
3 4%
D irec t investments Inf rastruc ture
41%
P rivate debt
50 %
9%
41%
51%
8%
24%
S eparate ac c ounts
W e are look ing to inc rease the number of G P s w e w ork w ith W e w ill not seek to inc rease or dec rease the number of G P partnerships W e are look ing to reduc e the number of G P s w e w ork w ith
A pproach to regionalmark ets
pp oac to 19%
gional
a
IfI f investing sec ondaries, w ill you ac c ess investing in in secondarieshow w illhow you access the mark et? the a t
t
21% 3 6% 67%
W e w ill invest 68%
82%
S elling f und stoc k s on the sec ondaries mark et
3 6%
79%
8%
45%
9%
64%
10 %
W e w ill not invest
Ac quiring f und stoc k s on the sec ondaries mark et
81%
56%
46%
64% 3 3 %
N orth Americ a
W estern E urope
ia acific
C entral/ E astern E urope
3 2%
L atin Americ a
18%
Investing in sec ondary f und
26%
M iddle E ast/ Af ric a
Inc rease ac tivity
K eep ac tivity at the same level
D ec rease ac tivity
2 0 1 7 G l o bal P r iv at e E q uit y Sur v ey
|
4 1
n
s t iinfifis
ti ti
s un
P rivate equity
Performance against b enchmark s o anc again t nc
58%
P rivate real estate
3 2%
Inf rastruc ture
3 0 %
P rivate debt
42%
68%
P rivate equity
3 6%
P rivate real estate
3 9%
72%
3 1%
Inf rastruc ture
Y es
N o
53 %
11%
48%
3 3 %
P rivate debt
69%
a
13 %
50 %
28%
17%
59%
Better than expec ted
As expec ted
13 % S hort of expec tation
M acroeconomic concerns
fi cnci in p onfi c urrent year
i at
al
uit
anc an c t
coc pa
ato
ac o cono ic conc n 81%
24%
53 %
11%
tat
aa
67%
23 %
48%
76%
Proportion
i at
aoc
41%
22%
n a t uctu
i at
21%
t
26% o
4 2
49%
confi
56% nt
| 2 0 1 7 G l o bal P r iv at e E q uit y Sur v ey
out t
14%
3 0 %
A global ec onomic slow dow n
18% a
confi
nt
C urrent low E xtreme interest mark et rate valuations environment
S low dow n Impac t in of US C hina P residential elec tion
13 %
Brexit
8%
7%
7%
Investment T errorism N egative saturation in public emerging perc eption mark ets of private equity
ant to i it a tn ip g nt to see L PA standardiz ation? tan a Want ization
i pacting n gotiating I L PA
t
impacting negotiating L PA
2 6 %
4 6 % 5 4 %
terms?
Y es
Y es
N o
N o
7 4 %
acroeconomic concerns
87%
con i 82%
an ato 80 %
79%
78%
in
E x tent of of due diligence E xtent due diligenc e
16%
8%
5%
10 %
75%
26% 66% 60 %
58%
52%
Proportion
41%
43 % K eyman L evel of the S truc ture L evel L evel of G P C law bac k c lause management of the of c arried c ommitment and f ee c arry interest esc row distribution terms w aterf all
T ransac tion f ee levels
N o- f ault divorc e
H igh priority 65%
40 %
3 0 %
Investment restric tions
S elec tion of leadership in G P s portf olio c ompanies
F irm c ulture at the G P level
S uc c ession planning at the G P level
61%
29%
M edium priority 48%
L ow priority
26%
R etention plans H ow an existing/ f or k ey staf f previous C E O of a at G P level portf olio c ompany interac ted w ith the G P
2 0 1 7 G l o bal P r iv at e E q uit y Sur v ey
|
4 3
Other market data 44 | 2017 Global Private Equity Survey
O t h er m ar k et dat a R aising a F und in 20 17?
I f yes, w hat siz e?
at iz
ai ing a un in
8 %
3 9 %
recently closed fund?
Y es
3 9 %
6 1 %
5 3 %
L arger
N o
E qual
S maller
45%
a o
o t
c ntl clo
un 23 % 15%
9%
Bef ore 2 0 1 3
8%
2 0 1 3
2 0 1 4
2 0 1 5
2 0 1 6 2 0 1 7 G l o bal P r iv at e E q uit y Sur v ey
|
4 5
O t h er m ar k et dat a o
ou s fi
fiin
o typically ou t picallex it those it t o positions? po ition i t insnon i cont-colling i uit po i itionsi i I s f yes, how odo you
1 5 % 4 2 % 5 8 %
Y es
N o
5 6 %
2 9 %
T ag along w ith lead sponsor M aj ority dec ision of syndic ate it it out in u nc
4 6
| 2 0 1 7 G l o bal P r iv at e E q uit y Sur v ey
ng
ding
O t h er m ar k et dat a What information rights are received for non-controlling equity positions?
at in o
ation ig t a
c i
o non cont olling
uit po ition
97%
ext 82%
t
age
78% 72%
71%
68% 57%
Audited annual financial statements
Unaudited quarterly financial statements
Board presentations
Updated capitalization tables
Budget to actual analysis
Significant event summaries
Board minutes
54%
Unaudited monthly financial statements
2 0 1 7 G l o bal P r iv at e E q uit y Sur v ey
|
4 7
EY contacts 48 | 2017 Global Private Equity Survey
G lob al Her b E nger t
A mericas ( continued) Sc o t t Z im m er m an
E M E IA
Asia-Pacific
Sac h in D at e
C h r is t ine L in
Global Private Equity Leader +1 212 773 6202
[email protected]
Private Equity Assurance Leader, Americas +1 212 773 2649
[email protected]
Private Equity Leader, EMEIA +44 20 7951 0435
[email protected]
M ic h ael L ee
P et t er W endel
A s h l ey C o up s
J ef f r ey Hec h t
Private Equity Advisory Partner, Americas +1 212 773 6782
[email protected]
Partner, Ernst & Young LLP +44 20 7951 1620
[email protected]
M ik e L o P ar r ino
O l iv ier C o ek el ber gs
J o h n K av anaugh
K ai B r aun
Global Wealth & Asset Management Markets Leader +1 212 773 8940
[email protected] Global Private Equity Tax Leader, Americas +1 212 773 2339
[email protected]
A mericas W il l iam
St o f f el
Americas Private Equity Leader +1 212 773 3141
[email protected]
M ar c el o F av a
Americas FSO Private Equity Leader +1 704 350 9124
[email protected]
Private Equity Tax Leader, Americas +1 212 773 2060
[email protected]
Sh aw n P r ide
Private Equity Assurance Partner +1 212 773 2753
[email protected] Partner, Ernst & Young LLP (Midwest) +1 312 879 2799
[email protected]
Partner, Ernst & Young LLP +44 20 7951 3206
[email protected]
Partner, Ernst & Young LLP +852 2846 9663
[email protected]
B r ian T h ung
Partner, Ernst & Young LLP +65 6309 6227
[email protected]
C as p ar N o bl e
Partner, Ernst & Young S.A. +352 4 2124 8424
[email protected] Executive Director, Ernst & Young S.A. +352 4 2124 8800
[email protected]
I an T ay l o r
Partner, Ernst & Young LLP (West Coast) +1 415 894 8712
[email protected]
E r ic W aut h y
Partner, Ernst & Young LLP (West Coast) +1 415 894 4365
[email protected]
2 0 1 7 G l o bal P r iv at e E q uit y Sur v ey
|
4 9
Private Equity International contacts 50 | 2017 Global Private Equity Survey
N ew Y ork A r l een B uc k l ey
L ondon Editorial Director +44 20 7566 5447
[email protected]
K ev o n D av is
Director of Research and Analytics +44 20 7566 5423
[email protected]
C o lm
Research Manager +44 20 7566 5451
[email protected]
G il m o r e
Managing Director — Americas +1 212 633 1075
[email protected]
D an G unner
D aniel Hum p h r ey R o dr iguez
C l air e W il s o n
B ennet t V o y l es
Editor, Private Funds Management +44 20 7566 4274
[email protected]
C h ar l es W ar d
Hong K ong
Senior Researcher and Contributor PEI Media
[email protected] Business Development — Americas +1 212 633 1452
[email protected]
i at uit nt national i t onl glo al pu lication it a p i a lation ip t n in to an un anag in p i at uit t
P h il ip B o r el
Director Event Portfolio Development — Americas +1 212 633 1454
[email protected] Senior Research Analyst +1 646 795 3260
[email protected]
A b out Private E quity I nternational
C h r is t o p h er P et er s en
Managing Director — Asia +852 2153 3840
[email protected]
ocu on t n u
aunc in c t titl co t p opl t un t capital p o i an t financial t n aping t in u t it an int g at t a o p ciali t ou nali t an ac in on on ong ong an o it an o private equity in institutional portf olios c ontinues to grow around the w orld, so w e ai to li an o co p n i o ing o a n p op i ta ata authoritative analysis and c ontext around w hy this is happening, and w here and how in to can fin alu in t a t cla co in to allocation t at gi into all g nt o p i at uit an tal to g n al pa tn li it pa tn a i o la gulato an financi o t in o capital o into an out o t cla o t i c at a ca ull u g l n o igital n co nta an anal i o all t t n an nt t at ap p i at uit a ll a a p op i ta ata a o un un anag an their investors as yet another integral part of our digital of f ering. t
u ont l agazin i pu li uppl nt an a in t t n a t a an a t cla an a a o
ti a a along it a i o in pt an t t at a fining t in u t a a o capital t at att glo all
u co ag a o n g oun on i licat lation ip t n g n al an li t an pa nc in p i at uit un anag t oug op ational i p o nt at t a a oun p i at uit nc a ing an p
po tant in u t i u uc a t o t n it pa tn t u t o g at nt t in u t a ilit to a alu tl l a ll a t ongoing at o anc a u nt
u in u t a a t in annuall a o a uni u a poll ai to cogniz t cont i ution o ci ion a to t lop nt o t a t cla i at uit nt national i t an in a li t o p ciali t oo titl an o t pu lication o a po t olio o in u t con nc inclu ing t an ou anua in o
2 0 1 7 G l o bal P r iv at e E q uit y Sur v ey
|
5 1
EY | Assurance | Tax | Transactions | Advisory About EY
EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com. © 2017 EYGM Limited. All Rights Reserved. EYG NO. 00221-171Gbl 1611-2113546 BDFSO ED None This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice.
ey.com
W e w o ul d l ik e t o ex t end o ur t h ank s t o al l t h o s e w h o h el p ed m ak e o ur f o ur t h annual global in usty sur ey possible e are gratifie by the o erwhelming response f r o m p r iv at e eq uit y f unds , and w e bel iev e t h e r es ul t s dem o ns t r at e t h e s t r engt h and det er m inat io n o f t h e indus t r y and t h e p r o f es s io nal s w h o ar e int egr al t o it s s uc c es s . At we are confi ent in the resolute nature of managers an are enthusiastic about t h e f ut ur e o f t h e gl o bal p r iv at e eq uit y f und indus t r y . W e l o o k f o r w ar d t o c o nt inuing t o inv es t al o ngs ide t h e indus t r y and s up p o r t it s ef f o r t s t o enh anc e o v er al l w el l - being f o r inv es t o r s w o r l dw ide.
P r iv at e E q uit y I nt er nat io nal , in p ar t ner s h ip w it h E Y , is del igh t ed t o p r o duc e t h e f o ur t h annual edit io n o f o ur gl o bal p r iv at e eq uit y indus t r y s ur v ey . O v er 1 0 0 p r iv at e eq uit y financial e ecuti es share their iew of the ey challenges an aspirations they face along with their strategies for bri ging the gap between the two his year s s ur v ey o f f er s a det ail ed s nap s h o t o f an indus t r y in t r ans it io n. T h ey t al k ed abo ut a br o ad r ange o f p r es s ur es , inc l uding dem ands by inv es t o r s and r egul at o r s f o r m o r e t r ans p ar enc y , p r es s ur e t o l ev er age m o r e digit al t ec h no l o gy , and a need t o m anage s t af f bet t er , p ar t ic ul ar l y f o r m il l ennial s . A s t h e s q ueez e o n m anagem ent f ees and yiel s continues e ceptional management of the finance an operations function of the firm is becoming not ust essential for its long term sur i al but a source of c o m p et it iv e adv ant age. W e bel iev e t h e s ur v ey dem o ns t r at es o nc e again t h e ex t ent o f t h e v al ue C F O s br ing t o p r iv at e eq uit y . W h et h er y o u ar e a p r iv at e eq uit y C F O o r p er f o r m ano t h er r o l e in t h e indus t r y , w e h o p e t h at t h is s ur v ey w il l h el p y o u m eet y o ur o w n c h al l enges .