Background
About the client:
Our client is a global buyout firm with USD$40+ billion in assets under management that focuses on international markets, with a particular focus on emerging markets. The group has over 300 employees, with 200+ plan participants.
About Holland Mountain:
Holland Mountain is a specialist consulting firm and data solutions provider with over 350 successful digital strategies and transformation projects for private capital managers. Holland Mountain’s ATLAS is an award-winning data platform that empowers fund managers in their data initiatives. This includes providing the reporting for carried interest and co-investment plan participants.
The problem: One size does not fit all
Challenges with Managing Carried Interest and Co-Investment Data
Despite the importance of carried interest and co-investment data in supporting employee retention and motivation, firms often struggle to provide timely insights and reporting on a person’s carry position within the business.
- The data involved is highly confidential and only accessible to a limited number of individuals within the firm.
- Many calculations are performed manually in spreadsheets which introduces a significant risk of error.
Limitations of Existing Solutions
Typically, firms have unique requirements, which makes it challenging to find a suitable technological solution. Off-the-shelf software often lacks the necessary flexibility and cannot solve the problem at hand.
Consequently, many firms resort to manual processes, relying heavily on Excel to meet their needs.
Our Client’s Unique Needs
In this case, our client wanted to report on carried interest and co-investment at the fund level, alongside a bespoke need to analyze compensation on a deal-by-deal basis.
They performed this analysis once per quarter – it was time-intensive and the wraparound data security controls were not fit for purpose.
Previous process for carried Interest and co-investment reporting
Recognizing that their current method for reporting on Carry and Co-Invest was not keeping pace with their needs for efficiency, precision and security, they chose Holland Mountain’s ATLAS Carried and Co-Invest solution to address these challenges.
The solution: Bringing a tailored solution, rapidly
Flexible Solution with ATLAS Data Platform
The foundation of ATLAS Carried Interest and Co-investment solution is based on the flexibility of the data platform – it is designed to accommodate bespoke requirements. Leveraging this flexibility, our data and technology team implemented a tailored solution that provides:
- Standardized reporting for carried interest and co-investment for plan participants
- Deal-by-deal reporting, for a specific group of plan participants based on different calculations.
Our client has a specialized compensation plan where certain participants receive payouts based on individual deals, a feature not available to all. To support this, we implemented automated deal-by-deal reporting with access restricted to the appropriate team members.
New process with ATLAS Carried Interest & Co-Investment reporting
Excel add-in for easy data entry
Our client utilized the ATLAS portal to input data into the system, leveraging our user-friendly Excel add-in.
Automation of Calculations
ATLAS handles vesting schedules and allocation rules automatically and produces outputs that fit the bespoke reporting requirements for different individuals within the business.
The reporting model also included the ability to filter deal by deal.
Portal access for the management team
The portal was set up by Holland Mountain and then made ready to be managed by their Accounting Team. Our client has full access to view and manage data, including inputting information, adding transactions and transactions allocations.
- The portal provides users with clear visibility into how data is being transformed and calculated, providing greater transparency.
After experiencing the platform’s flexibility, our client requested additional customizations, such as pro forma cash statements, enabling users to forecast their carry and co-investments.
Our Holland Mountain team worked closely with the client, providing guidance to ensure they could independently adapt as their requirements evolved.
Real-time and customizable dashboards
The ATLAS team developed a suite of standardized Power BI reports, accessible at any time by plan participants, with options to drill down and analyze different scenarios across multiple time periods. Deal-by-deal dashboards were provided to specific participants as needed.
Additionally, we designed dashboards for the Accounting Team – to verify data before it is released to plan participants – offering insights into transactional data, summary reports, tax reporting, and reconciliation tools.
Robust Security Measures
All data is encrypted and only accessible through authenticated SSO, with row-level security in place to prevent any overlap or data leakage.
The outcome: Enhanced efficiency for the business, real-time insights for plan participants
Holland Mountain was pleased to deliver a solution that addressed the client’s bespoke requirements, significantly reducing manual effort for the Accounting Team and accelerating the reporting process by shifting from quarterly to real-time reporting.
With the ATLAS portal, our client can independently manage the solution with minimal input from our team, while we remain available to support any new requirements as their needs continue to evolve.
Finally, every plan participant can access insight into their position directly from their desktop, phone, or tablet, with the ability to model the data for deeper analysis and insight.
ATLAS: Manage Carried Interest and Co-investment with ease
Revolutionise your carried interest and co-investment management with our flexible and scalable solution.
Contact our team of data experts to see our solution in action and how it can support your firm’s unique requirements!
