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KPMG UK calls for common language in private capital reporting

Private capital must adopt a common language or taxonomy for data reporting

Private capital must adopt a common language or taxonomy for data reporting

  • KPMG UK publishes roadmap to improving data exchange in private capital
  • Firm says that a common language on data reporting would enable managers and investors to scale up more efficiently and drive increased value through-out the investment life-cycle
  • Report developed in partnership with data standards membership organisation PCDS Alliance (formerly ADS Initiative) and incorporates the views of global investors and allocators with total AuM of over $1.2 trillion

Private capital must adopt a common language or taxonomy for data reporting if it is to support more timely and insightful decision-making in the investment process, according to business advisory firm KPMG UK.

The call comes as KPMG UK publishes its report titled ‘Improving data exchange fluidity between LPs and GPs’, in partnership with the Private Capital Data Standards Alliance (PCDS Alliance – formerly ADS Initiative), the membership organisation that supports the collaboration of private capital stakeholders to develop global data standards in the industry. The publication coincides with KPMG’s appointment as a founding member of PCDS Alliance.

The report consulted the views of global asset allocators and investors with over $1.2trillion in assets under management across Europe, Asia and North America. It found that information flows between investors and managers continues to produce challenges in terms of time and resource, as well as ability to elicit value-added insights efficiently and effectively as a result of legacy data structures.

 

Zeynep Meric-Smith, Partner and Head of Private Assets Consulting at KPMG UK, said:

“There is an incredible appetite from institutional investors to increase allocation to private assets, including private debt, infrastructure, real estate and private equity. Yet there is an opportunity cost here because of laborious legacy processes and technology that hinder insight-led decision making that could otherwise support better investment allocations.

“We’ve taken time to gather views from across the industry to really understand the challenges at play. For LPs they are looking for granular data in specific formats that they can leverage for portfolio analytics, value for money assessments and reporting to stakeholders, but often receive inconsistent, and unstructured data that requires significant resource to work through. Even some industry-driven templates are not widely adopted and patchy in their application. For GPs, the data requests are often unaligned to their other reporting requirements, take valuable resource away from their own investment and management activities and can vary greatly from needs investor to investor.

“The message we received is clear - there must be far greater consistency in the data needed for reporting. For us, that means the industry’s priority should be in creating a common language – a standard set of data requirements and definitions of those data points. This is something we’ve seen developed in other areas of financial services, such as banking. It can lead to far fewer mistakes, lead to more granular data being captured, speed up reporting and offer clarity in its consistency. But crucially it will provide an incredibly important foundation for developing common software platforms, driving automation and self-service tools and free up teams to focus on driving value in their respective functions.

“It is a form of data empowerment that will prove valuable for both LPs and GPs – further improving communication, transparency and relationships, and freeing up resources to focus on getting the best outcomes through each stage of the investment life-cycle – from entry to exit.  Now’s the time for the industry to come together and form a consensus on data definition and reporting. A common language will ultimately enable managers and investors to scale up more efficiently and benefit from the surging interest in these asset classes.”

 

Lorelei Graye, president of PCDS Alliance, said:

“The creation of our alliance is an important step in formalising data standards in the industry, something that increases transparency and accountability, and is in the interests of investors and managers alike. We warmly welcome KPMG into the fold. As a recognised global leader in the financial services sector its presence as a founding member of PCDS Alliance underlines the importance we see in this partnership and will encourage others to follow suit.”

                                                                            -ENDS-

 

Media contacts:

Alastair Henry, Citypress

Alastair.henry@citypress.co.uk / 0161 235 0320

Lorelei Graye, PCDS

info@pcdstandards.org / +1 803 404 3013

 

Notes to editors:

About KPMG UK:
KPMG LLP, a UK limited liability partnership, operates from 21 offices across the UK with approximately 16,000 partners and staff.  The UK firm recorded a revenue of £2.3 billion in the year ended 30 September 2020.

KPMG is a global organisation of independent professional services firms providing Audit, Legal, Tax and Advisory services. It operates in 147 countries and territories and has more than 219,000 people working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.

About PCDS:
PCDS Alliance (PCDS), formerly ADS Initiative, is the non-profit membership organisation that supports the collaboration of private capital stakeholders to develop global data standards for the industry.  PCDS represents some of the largest market participants on the globe and is committed to building consensus, maintaining its commercial neutrality, as well as developing and demonstrating the PCDS taxonomy for electronic reporting.