Re-imagining compliance tracking for private equity investment structures

Simplifying compliance for private equity managers and their portfolio structures

Private equity investment structures are inherently complex with various moving parts. You have the fund structure, holding structure, and portfolio level structure; keeping on top of compliance obligations is important across all three levels. It is common for compliance lapses to create value erosion during a transaction process.  

We at DealsPlus believe that compliance and control can be simplified and systematised with the help of tailored software that has the following features:

  1. It is holistic (covers all key areas of interest – tax, regulatory, financial); 
  2. It is dynamic (provides real time visibility and control); 
  3. Saves time and effort (easy collaboration with service providers); and, 
  4. Helps preserve value on exit (prevents compliance lapses). 

A holistic tracker – covers all key compliance areas

A holistic compliance tracker is one that can capture all ongoing compliance obligations across private equity manager’s investment structures – be it tax, accounting, regulatory or others. It doesn’t matter where your SPVs are located and how many different types of filing obligations they have, a holistic compliance tracker must be able to digitise your compliance calendars, track deadlines, and capture all filings in a flexible and easy way. Examples of the things it can track include, but is not limited to:

  1. Regulatory compliance obligations: AGMs, Board meetings, local companies house filings, ESG reports
  2. Tax: Annual tax returns, FATCA and CRS returns, Investor tax reporting deadlines
  3. Accounting: Filing of annual returns and accounts under local rules
  4. Banking: Ongoing Information that needs to be shared with your lenders under the facility agreement  

A dynamic and event-based compliance tracker 

Most compliance tools tend to be static and narrow in focus. A good one is not only flexible – e.g. allows you to create your compliance calendars across all areas as noted above – but also tracks event based obligations. This can be hugely valuable on private equity structures where events during the holding period have important compliance triggers. Here are a few examples of what a dynamic compliance tracker should be able to do:

  1. A company in your structure has issued additional equity or debt. The compliance tracker should automatically flag the necessary tax, legal, and regulatory obligations that arise as a result. 
  2. There has been a change in your lenders or debt instruments. It should flag the necessary withholding tax or transfer pricing obligations that arise as a result. 
  3. Track the board composition of the companies in a structure and flag the necessary obligations that arise as a result of change in the board – e.g. regulatory filings, tax residency risk etc. 
  4. If you make an add-on acquisition that gives rise to a number of post-completion actions or contractual obligations in the SPA, it should be able to help you track and manage these obligations easily. 

A dynamic compliance tracker is one that is flexible enough to be programmed to track all the events in your investment structures and flag obligations, preventing expensive compliance lapses on an exit event.  

A compliance tracker that saves time and effort

A great compliance tracker should save you time and effort, not add to it. In order to do this, it must have the following features:

  • Give you real time visibility and control on compliance obligations across all your investment structures. A clean dashboard that shows what is due, what is coming due, who is responsible etc. 
  • Offers an opportunity to easily collaborate with your service providers to enable them to help monitor and capture all the filings in an intelligent and easy manner.  
  • Creates a full log of your investment structure’ compliance history, along with underlying filings that is easily accessible both during the life of an investment and also during a due diligence exercise on exit. 

Help keep your portfolios transaction ready

A truly great compliance tracker helps you track and manage risks as they arise, keeps your portfolios transaction ready, and preserves value on portfolio exit event. 

At DealsPlus we are re-imagining the way compliance and controls work for private equity and their portfolios. Our ambition is to deliver a platform that maximises value for private equity managers. 

Book a customised demo to learn more about compliance tracking with DealsPlus.