Private Equity Luddites Cling to Excel

Nearly half of private capital fund managers surveyed by Preqin said they exclusively used Microsoft’s spreadsheet tool to monitor their investments in lieu of more sophisticated offerings.

Illustration by II

Illustration by II

The preferred software provider of private equity firms is … Microsoft.

In a new Preqin survey of 300 private capital fund managers around the world, 46 percent said they relied exclusively on Microsoft Excel to monitor their portfolios.

The most cited reasons for eschewing more specialized portfolio management software were that there was simply no immediate need for it — or that it was too expensive. About three quarters of the survey’s respondents represented venture capital, buyout, or growth firms, with the rest split among other private asset classes such as infrastructure, private debt, natural resources, and real estate.

“Significant numbers of non-adoptees believe that third-party systems are not capable of managing their data, or can’t see the benefits of using them,” said Chris Ferguson, chief executive of Preqin Solutions, in a statement. (Preqin Solutions, formerly Baxon Solutions, is one such third-party system.)

According to Ferguson, software providers like Preqin Solutions “will have to work hard to convince these managers of the benefits of their platforms if we are to see the industry shift further from Excel.”

Currently, about a quarter of global private capital fund managers use third-party portfolio monitoring software, while 15 percent are considering it. About 14 percent said they have developed an in-house system for portfolio management.


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Although Excel remains the most widely used tool, interest in portfolio monitoring software has risen over the last four years, according to Preqin — at least among firms managing $1 billion or more. Forty-one percent of these large fund managers said they are either using or considering using specialized software, compared to 27 percent in 2014.

But interest in portfolio monitoring tools has remained more stagnant among fund managers with less than $1 billion in assets: Seventeen percent had adopted or were considering adopting software in 2017, compared to 16 percent in 2014.

Other common forms of investment management software addressed in the Preqin survey include investor portals — used to share information such as performance statements and administrative documents with limited partners — and fund accounting software.

Investor portals proved a popular option, with 42 percent of surveyed fund managers reporting the use of tailored investor reporting software, and another 40 percent considering it. Fund accounting software was still more popular among $1 billion-plus firms, although it was less prevalent among smaller managers.

According to Preqin, survey respondents cited cost efficiency as the biggest driver of investment in private capital software, followed by a software tool’s potential to add value. Other reasons included data security concerns, regulatory requirements, increasing fund size or complexity, and investor requirements.