The Palatine Challenge
In managing and reviewing the performance of its portfolio, Palatine Private Equity (PPE) had become overdependent on its deal team members, which limited fund-level co-operation and control.
Data collection and monitoring was cumbersome and limited in scope, utilising Excel-based summaries of KPIs by company, transposed from PDFs and other reports. Though this system was sufficient for the running of a single fund, it became limiting as the second began to be invested.
Those at PPE found that more time was spent on data collation than on meaningful analysis. There were instances of inconsistency in financial reporting, with as many format variations as there were portfolio companies, and too many different sources of information to visit when analysing company performance history, valuations, standing data and ESG compliance.
PPE implemented Preqin Solutions’ cloud-based platform across its portfolio and internally to the Investment, Business Development and Portfolio Management teams.
Teams could shift their focus from sourcing and compiling data to the process of analysis and interpretation of performance. Comparative work was drastically accelerated by the single-source of financial and valuation data from fund level down, together with the evolution analysis function, which allowed for the recall of LTM information, regardless of period.
One positive sign of the step change from PPE’s adoption of the Preqin Solutions software came at a meeting of portfolio CFOs and CEOs, where the newly-operational platform was presented by way of contrast with disparate reporting bases of old. A screenshot of upload progress on actual and budget data by month across all companies led to a healthy discussion on who would be late next time: the extended content and profile of reporting was taken as read. Over the implementation phase, perception of the portfolio role had moved from an MI repository that followed board meetings, to a dynamic, group-like reporting function, where timeliness was a real driver.
Steve Donaldson, Head of Portfolio at Palatine Private Equity, said: “To exercise real control over a portfolio of companies, there is no substitute for understanding their individual business dynamics and drivers.” “Without consistent, timely reporting of financial and operational metrics, and effective tools to analyse such data, achieving such understanding rapidly becomes impractical after the portfolio reaches circa ten members. Preqin Solutions provides the platform for us to deliver on that real control objective.”
- Faster and more informative performance analysis enables better control over key drivers and a focus on relative trading measures such as cash conversion levels
- Performance appraisal is owned and highly visible across all fund users, improving reporting timetables and quality
- PPE has demonstrably improved its control over the portfolio from the perspective of its investors
- Board reporting and monthly analysis from non-exec team members is also improved in terms of quality and completeness, providing further impetus to a key control function
- In a typical four to five week cycle, the portfolio team saves several weeks of one person’s time, usually spent on the mechanics of compiling data, in favour of more productive purposes
Why PPE chose Preqin Solutions
- The benefits of a native cloud platform combined with Excel integration
- Flexibility in the upload process and access rights per user
- Flexibility afforded by user-defined, dynamic dashboards
- Mid-market focus and pricing
Download Palatine Business Case: Palatine Private Equity Business Case