Question to my fellow PE monkeys - how do you guys monitor a deal once its closed? I know at the Analyst / Associate level, most people are pretty much solely focused on deal execution but the more senior you get, executing the documents is where the game begins. Couple of questions here to clarify:
- What kind of reporting package do you require from your portfolio companies?
- Is there a system (maybe like iLevel) that the portcos have to use to give you the required information?
- Do you then track this information in an excel spreadsheet or some other software? If excel, is the model you use different from the initial deal model?
- What happens when an add-on is executed? Is a new model for the consolidated company created?
Hoping some junior - mid level folks can help me out here. I have talked to my own network and have received very wide ranging responses (one person told me their PE firm does no systematic financial monitoring other than asking the portcos for monthly financials and just eyeballing through that)
Hi neil91, check out these resources:
If we're lucky, maybe I can guilt some users to help you out: BBnkr10 wanderer Barbaric_monkey
You're welcome.
Usually we receive monthly reporting on both financials (the details vary on how strong the management team at the portfolio company) and operational KPIs depending on the type of business Quarterly you need proper 3 financial statements as well as the operational KPIs - this is mandatory and should be sent to LPs a couple of weeks after the quarter has ended
Usually if there are no alarming differences on the performance against the budget its all good, if not you need to dig deeper and understand what's happening
so its not only deal execution but portfolio monitoring is as important - monitoring is also the easy part of the job I'd say
hope that clarifies it a bit for you
Thanks, that's really helpful. Getting a little more specific, how do you receive reporting from the portcos? Do they just send excel sheets or is there a centralized software into which they have to enter information? How do you then track the financial metrics? I am assuming if they are entering data into a software, that would suffice. But if they are sending the 3 statements in excel, do you have some kind of an asset management template for each company where you track key financials and KPIs?
all manually done through excel and its not difficult and I guess the guys at the portco level they extract that from accounting and software but dont ask me about that as all i care of is receiving my reporting on time for the 3 statements there's a standard format depending on the company and its push and pull thing you keep giving them feedback until you are satisfied with the way they do their reporting reporting can be a pain in the ass sometimes especially when numbers keep dancing from month to month
Easiest part unless a deal goes west and you have ti shake things up in the company.
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