Blogs

Private equity operates a bit differently than public markets, which can make measuring investment success a complex but essential task. Investors and fund managers rely on various performance metrics to evaluate returns, assess the skills of fund managers, and determine how effectively they allocate capital. Understanding these metrics is crucial for making informed investment decisions and gauging a fund's potential success. We will dive into five commonly used metrics in private equity performance evaluation: Internal Rate of Return (IRR), Total…...

Fund accounting monitors capital commitments, calculates NAV, manages compliance, and facilitates investor reporting. Despite its critical role, many firms still depend on spreadsheets, fragmented systems, and manual procedures to run their back office. This outdated strategy is unyielding, inefficient, and introduces financial risk.  Manual fund accounting is also resource-intensive, making it harder to scale and meet rising investor demands for transparency and momentum. Many firms are failing behind when they  don’t adopt automated fund administration.  Manual fund management costs you…...

Today, the alternative investments industry stands at a technological crossroads. Fund managers face mounting pressure to deliver superior returns while controlling operational costs.  Truth is, the promise of automation is widely acknowledged, and we can all agree it improves efficiency in modern fund operations. But, at what financial imperative? A recent KPMG survey reports that over 30% still rely on spreadsheets like Excel for critical portfolio management functions. Are there tangible economic benefits that strategic automation delivers to fund operations?…...

Alternative investment funds, such as private equity, hedge funds, and real estate funds, offer unique opportunities for diversification and higher returns. However, many fund managers and family offices opt to self-administer their funds to save costs and maintain control. While this approach has its benefits, it also comes with significant hidden risks that can lead to financial, legal, and reputational damage.  In this blog, we’ll explore the key risks of self-administering your alternative fund and provide actionable strategies to mitigate…...

When you hear the term private equity, what comes to mind? Many envision a dynamic realm of bold investments and the excitement of high returns. However, before the thrill of major transactions and the intensity of boardroom discussions, there lies a crucial foundation that often goes unnoticed: the Limited Partnership Agreement (LPA). This document is not merely a legal formality; it represents a vital step in establishing a successful partnership between fund managers and investors. Reaching the LPA is not…...

The economic framework of private equity funds is characterized by several key components that shape both the fundraising process and the ongoing management of investments. Central to this framework are capital commitments from investors, distribution waterfalls, investment and divestment timelines, and various fund fees.  Within this context, financial concepts such as management fees, carried interest, and distribution waterfalls become critical. These elements dictate how fund managers are compensated and how profits are ultimately distributed among investors. Typically, the fundraising period…...

Know Your Customer (KYC) procedures are fundamental to the stability and security of the funds. They provide a framework for private capital firms to verify the identities of their clients and assess the potential risks associated with those relationships. While specific KYC requirements can vary across jurisdictions, core principles and best practices remain consistent, guiding institutions in their compliance and risk mitigation efforts. At Linnovate Partners, we understand the critical importance of KYC process in safeguarding financial operations. Our expertise,…...

The economic challenges of 2023 have influenced private market performance, as evidenced by the McKinsey Global Private Markets Review 2024. Private equity fund performance hit its lowest point in 15 years, with closed-end real estate funds experiencing negative returns for the first time since 2009. Infrastructure fund performance also lagged, falling below its long-term average.  However, this downturn comes with a silver lining. With funds paying less for their investments, private equity buyout funds have seen a slight decline in…...

As we approach the end of the year, it is imperative for fund managers to focus on the upcoming audit and tax season. This period can be particularly hectic, and at Linnovate Partners, we want to ensure that you are well-prepared to navigate this critical period successfully. This article aims to provide a comprehensive overview of what to expect and the critical steps to take, enabling us to conclude the year on a strong note. Why Choosing a Forward-Thinking, Tech-Enabled…...

Alternative investments have gained significant traction in recent years, appealing to a diverse range of investors seeking to diversify portfolios and enhance returns. Unlike traditional investments such as stocks and bonds, alternative investments encompass a broad spectrum of asset classes, including hedge funds, private equity, venture capital, and more. Within this landscape, various private fund structures exist, each designed to meet specific investment strategies, regulatory requirements, and investor needs.   In this article, we will examine the various private fund structures…...