Private equity CFOs are facing wide-ranging reporting demands from regulators and investors in the years since the financial crisis, leading finance teams to search for better data management and technology solutions.
That’s according to Disruption: seismic shifts in the private equity industry, EY's 2016 global private equity fund and investor survey.
The third annual survey of 103 private equity funds and 88 investors, conducted in collaboration with Private Equity International, finds 47% of private equity funds have faced a regulatory audit or examination in the past two years, compared to 41% in 2014 and 28% in 2013. The increased regulatory focus has led investors to request more information from funds, and 45% of investors surveyed say fund managers can improve their reporting, compared to 11% in 2014, a 400% increase.
Scott Zimmerman, EY Americas Private Equity Assurance Leader, says: "This regulatory disruption has caused a seismic shift in the private equity industry as investors and regulators demand better information more quickly. To magnify the problem, the reporting processes of private equity funds are still manually intensive, placing more burden on CFOs and their finance teams. Forward-looking funds will need to make investments to enhance their data management capabilities to successfully address the regulatory burdens that did not exist even five years ago."
Arleen Buckley, PEI Director of Americas Events, says: "Today's private equity CFO is at the helm of a vastly more complex organization than a decade ago and is tasked with ensuring that all key stakeholders, whether they are the general partner, limited partner or regulator, are satisfied."
