Meet PAT (“Portfolio Attestation Tool”) and why Private Equity firms should get to know PAT.

In the busy world of private equity, something as mundane as Portfolio Company (”PortCo”) tracking would seem like a no brainer.  After the initial due diligence, private equity companies spend millions or billions to acquire a private company – but how do they track what happens after the investment?  Sure, there are all sorts of financial metrics and KPI tracking software on the market, but what about tracking senior management’s decisions and ongoing operational risks?

The Challenge

We were presented with this challenge by a leading multi-billion Private Equity firm.  They had scoured the market to find such a tool that was flexible and enabled them to make sure that there was quarterly alignment between the PE firm and their PortCo’s.

They were not talking about financial covenants but rather making sure that the PortCo was adhering to the internal rules and guidelines set forth by the PE Company.  Operational factors such as limits on capex, anti-fraud measures, hiring of high-cost personnel, plus many more, needed to be assessable and tracked in order to comply with the guidelines set forth by the PE company upon its initial acquisition.

The PE firm was using spreadsheets and email to ascertain the quarterly compliance to their standards and spent a lot of time tracking down the completed attestations, let alone getting them within a timely fashion.  That is when we were contacted to see if such a tool could be created.

The Goal

The goals were clear, the tool had to do the following:

  • It needed to be easy to use (minimal training required for anyone to use).
  • It needed to be flexible so that the PE company could tailor the template/questions for each PortCo based on size or industry.
  • It needed to be scalable to support the PE company’s growing portfolio.
  • It needed to be secure as there would be sensitive data being reported.
  • It needed simple, yet informative dashboards to drive actionable insights at the portfolio level without having to dig for them.
  • It needed to be a SaaS solution so that no software would need to be installed.
  • It needed to be automated to remove the PE company’s intervention from dispatching reports throughout the year.
  • It needed to be schedulable, so that reports would deliver on a defined cadence and reminders would automatically be sent to their PortCo’s as reports neared their due dates.

What on the surface seemed like an easy to build tool took several iterations and many consultations with the PE firm to deliver a tool that met all their needs.

The Solution

After a lot of work, consultation and back forth with the PE firm, PAT was born.  PAT met all of the criteria and was easy to use and flexible so that anyone at the PE firm was able to start using with minimal questions.  PAT has saved the compliance department at the PE firm countless hours gathering up the data which used to take weeks to gather.  PAT has also had the added benefit of making sure the PortCo knew exactly what was required of them by the PE firm and got a reminder of it every quarter.

We are now introducing PAT to the rest of the financial industry.  If you would like to get a demo of PAT and see how PAT could help your firm save time and increase alignment with your portfolio, please click the link below.

Want to schedule a demo? Click here to start a conversation with us!