What if Luxembourg takes the lead in Private Asset Data Standardisation?

A more professional approach to asset servicing is required as global demand for private asset fund investments continues to grow. Investors have the right to demand regular, comparable updates of financial and qualitative data about their holdings. Greater standardisation of industry KPIs would make a major contribution to such an upgrade.

The private equity industry has thrived for decades on a foundation of mutual trust between general and limited partners. Such “club deals” are lubricated by semi-formal conversations and email exchanges between long-standing trusted colleagues, ensuring that portfolios are serviced in line with mutually understood values. Formal reporting tends to be of a relatively basic nature.

Fast changing industry

This personal approach works well when a fund has a handful of investors, but this reality has been changing fast over recent years as demand for private assets has boomed. It is now common for funds to have dozens or hundreds of investors, and this could become thousands if the process of “democratisation” of alternative funds takes full flight.

There is no pressing need for regular updates when investors have implicit trust in personal relationships, with these acceptable every quarter or even longer. However, things are different in today’s more impersonal global market, where many investors are attuned to the reporting rhythms of liquid assets, and thus have similar expectations for alternatives...