Limited partner reporting using VDR software

Experienced limited partners monitor the market closely, have excellent relationships with general partners, and have long demanded more transparency and accountability from private investors. But for LPs, the big question is not what to monitor, but how to do it most effectively. Most limited partners have many capital investments around the world and it can be very difficult to keep track of them all. In this article, we’ll explore how VDRs can help LPs manage their responsibilities. 

The origins of LP reporting: how it all began

In the early days of business in the world, people used envelopes, stamps, and the U.S. Postal Service to send out LP information and statements. Sure, it was time-consuming, but because of its time, it worked. Then, with the advent of the Internet came the time of e-mail as the main method of transmitting information, but here too, investors ran into their problems. Mailboxes were overflowing with notifications that had to be re-sorted to keep track of correspondence with fund managers in a coherent manner. But after several high-profile cases of hacking and data breaches, email was no longer seen by people as a reliable option for sharing confidential information. 

Why do LPs prefer portal reporting solutions?

Portal reporting solutions are designed to help take over some of the user’s work. They automate some of the workflow easing your burden, and for limited partners, this is a huge plus, as general partners are used to putting the responsibility of managing their investment portfolio on their shoulders.

Virtual data rooms are constantly improving, and now almost every one of them comes with built-in artificial intelligence. This streamlines your workflow, saves you time, and helps you keep everything under control.

Why can a virtual data room help you during your partner reporting?

Virtual data rooms have become a great replacement for email and other cloud storage services whose security was low enough to be trusted to store sensitive documents. In this general data room review, we’ll highlight the main advantages of VDRs that would help LPs: 

  • Transparency of the company’s operations

Thanks to VDRs, you can upload all the documents you need for reporting to your investors. Set up access to the right files to the right users so that your investors will be convinced of the transparency of your activities and your relationships will be strengthened.

  • Collaborative capabilities

Data rooms offer you several options for collaboration tools so you can resolve issues without leaving where you were original. Some vendors offer a question and answer feature where the user can ask a question and the rest will be notified instantly. That way you get an answer to your question as quickly as possible. Other vendors offer an encrypted chat function where you can exchange messages, images, and files in a completely secure environment. 

  • Improved Document Management 

The VDR space allows you to save a lot of time on uploading documents to the space. First, you can use drag-and-drop and bulk upload functions to make this process happen automatically and faster. Secondly, the space can automatically convert your files to RDF format so you don’t have to do it manually, which means you can upload documents as you originally had them. Some VDRs simply support multiple file types so you don’t have to format anything.