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Investor reporting is one of the most important pieces of fund administration as fund managers are legally obliged to let their LPs know how their investment is performing - and, of course, LPs are very interested in these reports. Typically, investor reporting is due within 45-days following the close of the quarter and fund accountants, fund operations teams, and portfolio companies are kept very busy during this time period as they race to get the reporting posted to LPs timely.
What makes investor reporting complex?
Navigating this intricate landscape means having to balance multiple priorities for investment funds. While nurturing relationships with portfolio companies takes precedence, they must also maintain an efficient operational setup to keep costs low for their LPs. Fund accounting, while essential, may not fall naturally with the entrepreneurial spirit driving many fund managers. To add to that, Limited Partnership Agreements (LPAs) contain various levels of complexity, as they often create the need for individual adjustment per Limited Partners (LP), and thus individualized reportings which demand accuracy. All of these factors together, make the all-important investor reporting a critical time-suck for funds.
The importance of accurate reporting for funds:
Reporting serves as a critical tool for providing transparency to LPs regarding the allocation and utilization of their capital. Without this insight, LPs would find themselves in the dark regarding the deployment of their funds from the initial investment stage to the eventual distribution phase, which usually spans several years.
Moreover, comprehensive reporting plays a vital role in the fundraising efforts of investment funds. Potential LPs evaluating whether to commit capital to a follow-on fund rely heavily on the track record and transparency of previous funds. Therefore, meticulous reporting not only fulfills contractual obligations, but also enhances the fund's reputation and credibility in the eyes of current and prospective investors.
So, how can you tackle this as a fund?
bunch has worked hard to develop a solution to make the reporting process as seamless, and painless, as possible by introducing data-driven automations. In order to do this, bunch's platform:
1. Extracts the key economic terms from the LPA and side letters, and translates their impact on the financials
2. Imports data from the accounting and portfolio companies
3. Creates polished reports, without the need to manually create individual pages for each LP or portfolio company, all tied to intricate fund-specific calculations running in the back
bunch approaches each fund reporting on a case-by-case basis, ensuring that the template created is the perfect fit for your fund's terms. We understand that not only are funds complex - they are also unique and a one-size-fits-all approach is not a solution. Investor reporting is the North Star for your LPs, and your LPs' happiness is the North Star for bunch.
Looking to better manage your investor reporting for your fund? Connect with us at sales@bunch.capital or visit our website to learn more about building on bunch. We are here to empower you and your LPs!
