PitchBook Adds New Performance Datasets & Research to Strengthen Fund Manager Due Diligence Workflow
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SEATTLE, March 11, 2021 /PRNewswire/ -- PitchBook, the premier data provider for the private and public equity markets, today released several improvements to the fund manager due diligence workflow by incorporating new performance metrics on the PitchBook person profiles of general partners (GPs). Limited partners (LPs) will now be able to easily view performance analysis on lead partner deals, affiliated funds, career track record and GPs' professional networks. This release is part of a broader initiative at PitchBook to provide increased transparency into alternative investment strategies and fund performance through the development of new datasets, tools and institutional research. Alongside due diligence platform improvements, PitchBook's Institutional Research Group has also established a new quantitative framework to classify private fund managers based on their investment style. PitchBook's Private Manager Style frameworks repurpose the Herfindahl-Hirschman Index (HHI), a common measure of market concentration, to determine a GP's investment style in the due diligence process or track style drift in annual reviews.
For more information on PitchBook's platform improvements for LPs and GPs, click here.
As institutional investors increase their focus on the alignment of interest and transparency with their private equity manager relationships, the depth of the fund manager diligence process has increased. In recent years, ILPA (Institutional LPs Association) revised recommended diligence questions to include deeper inquiries on fund manager teams, including tenure, network and investment performance. Such information is challenging to gather in the opaque private markets, creating process inefficiencies and inconsistent due diligence analysis. To support the growing fund manager due diligence process, PitchBook has added new datasets to GP person profiles within its platform. These datasets and tools provide the transparency LP's require for asset allocation decisions, including:
- Board Seats – Lists current and past board seats held by GPs, along with tenure, to showcase experience and track record.
- Lead Partner on Deals – Lists deals involving GPs as lead partners, detailing investment exposure and industry focus area.
- Affiliated Funds – Displays IRR and quartile performance data on each fund associated with a GP, along with easy access to deeper report drill downs.
- Analytics – Provides a holistic view of deal track record, based on lead partner deals and Affiliated Funds.
- Professional Network – Includes a GP's professional network across Firms and Fund Team Members, Board Members and Portfolio Executives.
- Affiliated Funds by Type – Details a GP's historic fund category focus, indicating investment strategy.
- Fund Performance – Highlights affiliated funds by performance quartile, demonstrating the consistency of performance.
"As the private markets grow and mature there's a call for increased transparency from LP's to better understand fund manager strategies and performance. The release of new datasets on GP person profiles provides detailed insights for LPs as they make allocation decisions and conduct due diligence," said Michael Mott, lead product manager at PitchBook. "Coupled with our institutional research on the topic, PitchBook is quickly becoming the industry standard for timely, comprehensive and transparent private market fund performance data and insights. We plan to continue integrating new datasets and building advanced tools to help LP and GP clients form winning investment strategies."
Additionally, PitchBook's Institutional Research Group recently published new research to help asset allocators and other private market participants objectively assess important qualitative characteristics of private manager portfolios, such as industry, geography, and deal type. PitchBook's Private Manager Style frameworks for PE and VC calculate the proportion of an investor's collective portfolio within each sector and industry group (or other characteristics such as deal type or geography) and generates a measure of concentration. While a firm's past investments do not necessarily dictate its future ones, LPs and entrepreneurs can use PitchBook's Private Manager Style frameworks to identify GPs that fit a desired profile. These frameworks also help allocators contextualize the vast array of strategies employed in private markets, such as specialist and generalist strategies.
"One of the biggest challenges private market participants face is understanding the various strategies deployed by fund managers," said Andrew Akers, CFA Senior Data Analyst at PitchBook. "Leveraging PitchBook's Private Manager Style frameworks, LPs can improve their understanding of the various tactics private managers use to build portfolios, how a manager's exposures fit within an existing private market portfolio, ensure a manager's actual investment history is consistent with its stated strategy and quickly compare managers to determine alignment."
To access PitchBook's Private Manager Style frameworks, click here.
About PitchBookPitchBook is a financial data and software company that provides transparency into the capital markets to help professionals discover and execute opportunities with confidence and efficiency. PitchBook collects and analyzes detailed data on the entire venture capital, private equity and M&A landscape—including public and private companies, investors, funds, investments, exits and people. The company's data and analysis are available through the PitchBook Platform, industry news and in-depth reports. Founded in 2007, PitchBook has offices in Seattle, San Francisco, New York and London and serves more than 50,000 professionals around the world. In 2016, Morningstar acquired PitchBook, which now operates as an independent subsidiary.
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