Growing ILPA Reporting Template Adoption Accelerates the Demand for Standardization in Private Equity Reporting

September 7, 2017

The ILPA Reporting Template is increasing in its use across the industry; well over 100 organizations have endorsed it and as of Q1 2017, more than 160 general partners (GPs) were known to be completing the Template for limited partners (LPs).  This number is surely higher today and some LPs are looking for ways to systematically collect and analyse the incoming Templates, both in Excel® or in a digital format like XML.  This trend has raised some new and interesting questions for market participants. 

Recent Survey 

Findings of a recent global survey performed by The Economist Intelligence Unit (EIU) of 200 senior asset management and institutional investor executives, found that the Degree of Transparency was the most important investment consideration both in the pre- and post- investment period(1). 

Source:  The Economist Intelligence Unit and Northern Trust 

Based on these findings it is not surprising that the ILPA Reporting Template requests have increased and as more investors agree on this best practice, more GPs are willing to comply.  However, the template is robust and at least initially, it is not easily prepared. 

The ILPA Reporting Template Makes Waves 

The 2016 release by the Institutional Limited Partners Association(2) (ILPA) of the ILPA Reporting Template in Excel® (and later in digital format by the AltExchange Alliance’s(3) open standard) for standardized fees, carry, and fund expenses was the first major collaborative step towards a standardized format.  This is a big shift for private equity were PDFs have been long been the medium of reporting.   

It is the ILPA Reporting Template’s increasing adoption that seems to have raised the appetite of GPs and LPs alike for more streamlined solutions. 

One private equity CFO recently described the ILPA Reporting Template as a "super report"  because of the way it consolidates information from various GP reports and systems. 

GP Perspective - Compiling the data for this ILPA “Super” Template is actually more involved than some might realize because it consolidates fees, carry, and expense-related information from both the GP management company’s general ledger and details from the private equity fund-level accounting ledger.  Meals and travel expenditures might be on the management company’s books while the management fees and carried interest allocations are booked at the fund level.   

This has led GPs to look for ways to create a push-button process for Template preparation from their different systems.  Additionally, the Excel® format of the Template opens the door for a digital communication of these reports in an industry that has relied heavily upon PDFs.  However, like placing a phone call requires two parties to have a telephone, both GPs and their LPs need ready technology.  

LP Perspective - A new and more promising dilemma has risen for LPs with increasing adoption of the ILPA Template because for the first time, they are seeing more consistent and comparable data across numerous investments in their own portfolios.  The prospects of this increased transparency into details of their investments and the impact that their deal terms have over the private equity fund lifecycle is exciting to LPs.  However, their methods of collection and data capture must also advance with the improvements in reporting practices.  

Static PDFs have been effective for keeping document archives but now with these improvements, an LP must consider their process and controls around the new electronic and digital reporting formats:   

  • ‍How does an LP capture a permanent record of a quarterly Excel® document that could technically be altered? 
  • ‍How does an LP accept a digital format of this report such as in XML or JSON? 
  • ‍Where can they find technology solutions that are ILPA-compliant? 
  • ‍How does an LP keep these financial and reporting tools up to date as the reporting best practices continue to evolve over the next few years?  
LP Technology Gaps

It could be a misnomer to call the current roadblock to digitization an LP technology gap simply because many LPs currently utilize Excel® as their sole technology solution to analyse and store their investment performance data.  This fact may be surprising but it is true today even for some of the largest institutional investors.  The real reason for spreadsheet reliance though is most certainly not placed at the feet of LPs for failing to build or purchase solutions.  No, it is a lack of industry standards that necessitates the manual work.  The complexity and sophistication of LP portfolios have increased as allocations to private funds have increased but the private equity industry as a whole has yet to widely adopt a global set of data definitions and formatting standards for reporting, therefore, Excel® has remained the go-to tool. In absence of a generally accepted reporting standard, the formats of an LP’s incoming statements vary dramatically from one private equity investment to the next.  Further, the differing level of details that can be provided means that no matter how comprehensive an LP’s data capture effort is, they are always struggling to obtain consistent and comparable data.  Increasing adoption of the ILPA Template has begun to slowly chip away at this problem at least as it relates to quantifying LP-centric investment costs. 

Covering the Standards Gap 

To cover this gap in reporting and technology solutions, many LPs and their providers are building custom databases to record detailed investment data.  LPs either perform their own data entry into their platforms in-house or outsource the manual data capture efforts to service providers who re-key information from the LP and fund statements, “scrape” PDFs where possible, and apply machine-learning to train computers to better interpret different statements in the future.  This includes subscribing to data feed services that capture only fund-level data and some portfolio company look-through details.  With the above-mentioned variety of reporting formats that each LP contends with, it can be quite difficult to identify the same set of data points across each investment.  The result is that even simple collection and data entry requires analysis and critical thinking to ensure an LP has consistent, complete, and accurate data upon which to make informed decisions. 

The largest LPs who have the resources to build internally are doing so but at risk of limitations due to the constant evolution of technology that is difficult for an organization that is primarily focused on investing to manage.  Other LPs who have the budget to outsource bundled services to large administrators and banks are choosing this path but the annual fees can cost millions.

Historically, many investors have relied on investment data manually aggregated by their investment consultants and custodians but there seems to be a strong desire to own and to analyse their own data.  Reading RFPs released in the last 18 months by major LPs reveals an active pursuit of technology and services to cover these gaps in reporting and current operations.   

We've created FirmView to help LPs manage and analyse their ILPA Reporting Templates as well other ILPA/AltExchange - compliant formats. FirmView® is a cloud-based performance management solution built exclusively for the Alternative Asset industry and meant to serve as a bridge between GPs and LPs


Digital Provider Platforms  

Technology providers and fund administrators alike are hoping to on-board as many GPs and LPs as possible to gather a critical mass of private equity data onto their own commercial platform solutions.  The idea is to obtain automatic uploads where possible from GPs and portfolio companies or have them manually key critical financial data onto these platforms.   These approaches can be very useful however, a single universal “language” (or digital standard) for all market participants to communicate financial data regardless of their chosen technology is needed more than ever because not every GP is going to utilize the same provider and not every LP should be required to either.   

The Path Forward  

GPs come in many different shapes or sizes and so do their accounting and reports.  LPs who are managing portfolios with dozens and sometimes hundreds of different investment funds are struggling to aggregate and analyse their data.  A single open data standard and possibly an industry developed utility that is system agnostic must be provided and embraced by all market participants in order to streamline reporting.  The right answer is to embrace a single standard across the board and allow for all market participants - GPs, LPs, and their service providers – to communicate with an open, digital standard that allows for any solution and every stakeholder to work with clear, consistent data across every investment. 

About the Authors 

Richard Change is PFA Solutions co-founder and managing partner.  In addition to his role at PFA Solutions Richard also serves on the Board of the AltExchange Alliance and various industry committees.  Prior to Co-Founding PFA Solutions, Richard was the Chief Architect at The Carlyle Group where he successfully implemented strategies that transformed and evolved mission critical systems while reducing overall spend and the total number of development resources.  Richard holds a B.S. in Electrical Engineering from the Catholic University of America and a M.S. in Management of Information Technology from the University of Virginia, McIntire School of Commerce. 

PFA Solutions FirmView® 

As co-founder of PFA Solutions and with 12 years as Chief Technology Architect for one of the largest GPs, I have first-hand knowledge of solving for the needs of reporting standardization and digitization.  Today’s LP has to expend far too many resources and time accommodating the dozens if not hundreds of variations in reporting across their portfolios in order to successfully consume data and perform analytics.  I believe it’s time to help bring GPs and LPs together and that we can only solve this through an open standard. This is why PFA Solutions has built FirmView® around the most up-to-date best practices and digital standards of the ILPA and the AltExchange Alliance.  We equip LPs with the needed technology tools that allows them to own and manage their data in a variety of formats.  We work with your GPs to help bring more of your private investment fund data online through digital reporting. We are in a digital age and given the normal life-cycle of private equity, this will be a slow and steady progression but your technology and providers need to be ready and adapting to this changing landscape; PFA Solutions is ready to meet this need. 


Lorelei Graye is an independent consultant in private equity and advisor to PFA Solutions.  Formerly, a reporting officer for the South Carolina Retirement System Investment Commission (RSIC), Lorelei spearheaded the development and implementation of the Commission’s annual fee collection, validation, and reporting process which was featured in a notable April 2015 CEM Benchmarking study [1].  Over the past three years as a strong proponent for reporting standardization including the ILPA Template, Ms. Graye has travelled extensively to teach and promote best practices.  Lorelei has 20 years of business experience and holds business degrees in finance and accounting summa cum laude.

[1] Dang, Andrea CFA; Dupont, David CFA; and Mike Heale. “The Time Has Come for Standardized Total Cost Disclosure for Private Equity."  

Footnotes and Attribution
  1. The Economist Intelligence Unit and Northern Trust. “The Rise of Transparency Consideration in Asset Allocation.” The Economist, Economist Intelligence Unit survey, February 2017.  See: 
  2. ‍“The ILPA is the only global, member-driven organization dedicated exclusively to advancing the interests of private equity Limited Partners through industry-leading education programs, independent research, best practices, networking opportunities and global collaborations.  Initially founded as an informal networking group, the ILPA is a voluntary association funded by its members. The ILPA membership has grown to include over 400 member organizations from around the world representing over US $1 trillion of private assets globally.”  See: 
  3. The AltExchange Alliance is a member-owned non-profit organization established to ensure the open standard becomes the de facto standard for private equity reporting. Its primary asset is the Standards definitions which are open and owned by the Alliance.  See: