What is the AltExchange Alliance?
The AltExchange Alliance is an industry body with a charter to define and maintain a set of common data standards for the private equity industry. The Alliance was officially announced in May of 2013 and is a non-profit organization. Members represent firms of all geographic locations and types including general partners, limited partners, fund of funds and service providers. There are more than 20 founding members from institutions internationally representing all industry categories.
The Alliance is governed by a set of bylaws and a Board of Directors elected by the Alliance members. The Board is assisted by a number of working groups focused on maintaining the data standard, membership and communications within the alliance and the industry.
How does it work?
How is the AltExchange Alliance governed?
The AltExchange Alliance is a nonprofit organization governed by a Board of Directors elected by its members. The Board of Directors is responsible for ensuring that the Alliance delivers benefits to the members and communicates the benefits of the Alliance in the marketplace such that the AltExchange standard becomes the de facto standard for private equity reporting.
Is the AltExchange Alliance working with ILPA?
AltExchange Alliance supports the ILPA best practices for reporting. In fact, the Alliance working group includes both current and former ILPA Executive Committee members.
Why is there a need for AltExchange if I am an ILPA member?
The ILPA guidelines are focused on best practice reporting and, although templates exist, their usage is interpretive and standardization and enforcement is lacking. The AltExchange Alliance standards remove ambiguity by ensuring that all interested parties know exactly what is being produced, that data has been certified and validated, and how to use the data once received.
How will this initiative become a market standard?
The benefits of using the AltExchange standards will speak for themselves for both fund managers and investors. Over time, members will actively encourage ‘take up’ of the standard across the industry.
Why would GPs and fund managers change the way they report?
Actually, GPs will not change their formal reports. Rather, they will change the format of the actual data they share with their limited partner investors. This will lead to a reduction in cost for both parties. For the GPs, they will no longer need to produce multiple data reporting formats for their various investors, ultimately providing them a better service.
In practical terms, how does it work for a GP?
Most GPs and fund managers have solutions for managing back-office investment accounting. Just as a general partner produces reports for individual investors, going forward, they would also provide reports or data files using the standardized AltExchange format.
Will AltExchange replace the reporting process between a GP and LP?
No. GPs have a unique relationship with their investors and the AltExchange initiative complements their suite of offerings including marketing literature, branded investor portals and so forth. From the LP perspective, they will use the set of information received from the GP using the AltExchange format for internal reporting and analytical processes, as today, but at a substantially reduced cost in terms of time and labor.
How can it help me?
What are the benefits of AltExchange for LPs?
For limited partner investors with a portfolio of funds, obtaining data across multiple sources in a format that is both consistent and easy to upload into existing portfolio analysis platforms poses a considerable challenge. Significant effort is invested in accomplishing this task. By using a validated standard, AltExchange ensures that the data passing through the AltExchange Validation Platform is consistent across all sources using the format. This will significantly reduce the effort required to manually perform the validation step of the process while accelerating the ability to assemble the data for portfolio-wide analysis and reporting.
As an AltExchange member, a limited partner can focus on investment performance and insights driven by astute analysis rather than on gathering and manipulating data.
As AltExchange members, LPs commit to requesting their GPs to provide information using the AltExchange format and to establish the processes to enforce the standards where possible.
What are the benefits of AltExchange for GPs?
The reporting demands placed on the GPs are ever increasing. It is not uncommon for large LPs to have their own specific reporting pack that a GP must complete on a periodic basis. This consumes time and resources in terms of completing the reports and also from a compliance and sign-off perspective.
The AltExchange data standard will enable a fund manager to produce a single information pack for investors requesting data in either the AltExchange or ILPA format. AltExchange offers tools for GPs, fund of funds, fund administrators and other managers to produce efficiently the required data in the format of the AltExchange data standards.
As an AltExchange member, a general partner commits to providing information in the format of the AltExchange data standard and to validate the data files using the AltExchange Validation Platform when requested by investors and other limited partner members.
What are the benefits of AltExchange for technology vendors?
The AltExchange standard enables users to realize efficiency benefits in terms of producing compliant off-the-shelf reports and data presented in a single format. A vendor’s clients will likely desire to leverage the capabilities enables by the AltExchange data standard, and enabling the ability to either import or export data in this format will meet an important customer requirements. Note that the AltExchange format incorporates the ILPA guidelines, which means there is only one standard to support.
What are the benefits of AltExchange for Advisors?
Advisors face the “multiplier effect” versus the challenges faced by a single LP because they represent multiple investors. AltExchange enables advisors to easily import and aggregate data so they can then focus on building sophisticated performance reports, using their solution of choice. In addition, participation in AltExchange can significantly reduce the need for custom reporting to clients while enabling faster response times. Advisor Members are firms that commit to providing information to their clients through the AltExchange platform when requested.
Who is behind it?
Who owns AltExchange?
The AltExchange Alliance is member-owned. Its primary asset is the Standards definitions which are open and owned by the Alliance.
The affiliated but separate AltExchange Validation Platform (AVP) is owned and operated by eFront
(an industry software provider for professional investors in private equity
, real estate
and other alternative asset classes). The Alliance has contracted with eFront to build and maintain the validation platform. The AVP will provide general support services until the point where the Alliance can provide general services in its own right.
How many people work for AltExchange?
The Alliance currently consists of founding member organizations who are involved in the initial work. In the near future, the Alliance will hire an executive staff to oversee all relevant Alliance operations. General administrative support services will be provided initially by the AltExchange Validation Platform.
What is the relationship between the Validation Platform and eFront?
The AVP is owned by eFront but is independent of other eFront products. eFront’s other products will have the capability to process the AltExchange standardized XML data files as will any other software from other solution providers who may elect to enable the same capabilities.
How can i join?
Organizations interested in joining the AltExchange Alliance may apply in writing to the Board of Directors by completing the membership application. Applicants must complete the membership application with final approval to be determined by the Board of Directors.
Each participating organization is eligible for two delegate places in the Alliance. The annual fee is $1,000 per organization and entitles the member to use the AltExchange data standard reporting format and affords the opportunity to participate in the maintenance of the standards. Delegates may participate in various working groups or be elected to the Board.
If interested in applying, please navigate to the Contact Us
page and select “Joining the Alliance”
under “Interested in?”