A guide to

Portfolio Monitoring

Portfolio monitoring has long been an essential part of the investor journey

It’s key to assessing the impact on the investment in an asset. Key to evaluating the success of a value creation plan. And key to unlocking the potential of alternative investments.

Then and now

Historically, portfolio monitoring has involved the collection and storage of various company performance metrics. However, over the last few years, there has been a push from alternative investors to not just collect data from their portfolio, but to use it as a valuable tool.

The key drivers

There are broadly three key drivers for why data should be used as a valuable tool.

Let’s take a look at each of these in depth to find out more.

A desire for better value creation and strategy execution

Formalising value creation plans, and creating measurable goals is essential for managing an asset and increasing its value. Assessing these measurable goals is just one use of portfolio monitoring data.

Ongoing collection of metrics, including up to date, accurate forecast and budget data can be key to identifying any issues earlier, allowing plans to be altered and problems averted.

Living in a post-pandemic world, we have seen first-hand the impact of an unknown, unexpected event on investment portfolio. Data collected can be used to perform scenario analysis and ‘what if’ modelling, allowing investors to better predict impacts on portfolio, and draw up robust contingency plans.

Being able to demonstrate the results of a well-executed value creation plan, with data to support it can provide an invaluable marketing tool for an investor. In order to demonstrate increase in value to prospect investors, as well as demonstrate a blueprint of tangible benefits to prospective investees.

Increased demand from investors

Unsurprisingly, data requirements from investors have never been more frequent, comprehensive, or bespoke. The world is driven by understanding and using data and the alternative investment industry is no different.

Due to enhanced returns, when compared with public market offerings, alternative investment is gaining significant popularity. And with this comes public market level data expertise expectations.  

Reacting to ever changing market legislation

With a greater push from investors into the alternative investment market, there are also consistent increases to legislative requirements.

Trends in ESG, such as the introduction of Sustainable Finance Disclosure Regulation (SFDR), has pushed for improved transparency of sustainability claims for investors. This has increased the data gathering burden on investors, requiring the collection of a large number of metrics on an annual basis.

Adapting to these changes requires a new approach to be undertaken

Working with our clients, we embark on the following journey to ensure that they are getting the most out of their chosen portfolio monitoring solution.

Improved collection process and data storage

The collection process is key to successful portfolio monitoring, as without up to date, accurate data, no insight can be gathered. This collection process can be a key factor in a great relationship with an underlying portfolio company. 

We work with our clients to ensure that the collection process is quick and simple Ensuring it doesn’t create a burden on the investment management team, or the portfolio companies themselves.

Our focus is always to create integrated solutions with other systems, further expediting this collection process and the ease in which our clients can enhance their data.

Creating enhanced reporting capabilities

Faster, more engaging content provided to investors improves investor relations. As well as saving the investment team time to be able to perform more value-add work.

Being able to create easy, publishable reports to demonstrate results is key to any data process. Our team can support the design and build of these reports within the chosen solutions we recommend.

When combined with a data strategy project, this data can be combined with other sources to allow the creation of a holistic reporting infrastructure. You can find out more about our approach to data strategy here.

Creating flexibility to always meet evolving needs

The process cannot be static. Investors and their solution must be able to adapt to their growing needs. So, our solutions are built with the future in mind.

We are always focused on working with our clients. So, as part of the process, we provide them with the skills and support they need to be able to enhance their platform according to any new requirement.

And where our clients don’t have the in-house capability to deliver these changes, our consultants can work with the investment managers to scope and deliver any new requirements.

In conclusion

If you’d like to talk about your approach to portfolio monitoring and how we can help you create a dynamic and insightful focus on it, then we’d love to talk. We have years’ of experience in helping businesses in the alternative investment sector transform their approach to data and portfolio monitoring.

Contact Us

Our team of experts is ready and waiting to discuss your unique needs.