Is your firm still using Excel spreadsheets to manage the carried interest plan? Many Private Capital firms are reluctant to move away from spreadsheets due to the complex nature of bespoke calculations, but a need for transparency is driving increased levels of interest in digitalization of carry plans.

Manual solutions lead to errors, inefficiencies and bottlenecks in the reporting process

Many Private Capital firms still rely on spreadsheets to handle carry compensation arrangements, which makes plan administration unnecessarily time consuming. Any solution that relies on manual input will have inaccuracies over time and as mistakes inevitably creep in, the firm’s reputation is put at risk.

As investments are realized and new funds launched, the management of carry plans becomes increasingly complex, yet due to the sensitive nature of carry data, spreadsheets tend to be managed by a very small number of gatekeepers. This means plan members cannot access any reports or data, leading to confusion over the value of their plan and subsequent ad hoc queries about the details of their holdings. Typically, these queries need to be handled by senior members of the finance team, often the CFO, which takes valuable time away from more strategic activities.

So why do firms still rely on Excel for their carry plan administration? Spreadsheets are certainly familiar so it may seem simpler to stick with what they know, rather than risk a switch to a new system. Additionally, whilst Private Capital as a sector has made a definite shift towards digitalization, much of the focus is still on core investment systems.

Better reporting leads to better results

Firms who have already adopted digital carry plan solutions are experiencing huge benefits. In addition to reducing the time that CFOs are spending on manual queries, reputational risk is significantly reduced; carry plan data is secure, comprehensive, reliable, and accessible.

Accessibility is perhaps most critical for plan users. In the absence of a digital solution, they tend to remain in the dark about the true value of their carry plan and updates will typically be shared in a static PDF, often shared just once per year.

By contrast, where plan participants can access secure reports and dashboards, they can see an updated snapshot on-demand, which helps to build better understanding of their overall compensation. It is no surprise that firms who enable their teams to access and track rewards and allocation will benefit from lower staff turnover and higher levels of employee engagement. This is increasingly important as competition for Private Capital professionals grows fierce; firms that can offer a well-administered carry plan with on-demand dashboards will be able to attract and retain the best talent.

The best solution is one that can handle highly confidential data, ensuring accurate records can be maintained with ease, and enabling all members to have self-service access to their carry plan. None of this is possible with spreadsheets alone.

What are the potential benefits of the ATLAS Carry Plan solution?

  • Streamline carry plan administration, with fewer errors, reduction in ad hoc queries and ability to control sensitive data in-house
  • Provide employees with a better understanding of overall compensation, reducing employee turnover
  • Improve firm-wide performance by clearly aligning employee rewards with company objectives.

Combining industry expertise with transformational technology, the ATLAS Carry Plan solution is suitable for all alternative asset classes.

To find out more and book your demo, please get in touch