Carlyle invests in LP-friendly reporting technology

The firm, along with Duff & Phelps, has led a second financing round for iLevel Solutions, a company that spun out of The Blackstone Group that makes private equity reporting technology to replace outdated manual processes.

The Carlyle Group has invested in some LP-friendly technology developed by former IT employees at The Blackstone Group that is meant to simplify reporting between general partners and their investors.

iLevel Solutions, which provides software for the private equity industry, announced Tuesday an investment round for an undisclosed amount from Carlyle and valuations firm Duff & Phelps. The company received an initial, $6 million funding round last year from Egis Capital Partners, Swift River Investments and Epiphany Ventures. Blackstone is also an investor in the company.

Carlyle and Duff & Phelps have also become clients of the company, iLevel Solutions said in a press release Tuesday. Carlyle is making the investment from its balance sheet and not from any of its funds, according to a person with knowledge of the deal.

“The Carlyle Group … sought a solution to facilitate timely, accurate data collection and transparent reporting,” the company said. “Carlyle selected [the company] to provide a comprehensive technology platform to achieve greater visibility into their investments while providing greater transparency, speed and frequency of reporting to their investors.”

[Carlyle will be able to] “provide greater levels of transparency and more timely reporting to our investors.

Adena Friedman

Carlyle will be able to “provide greater levels of transparency and more timely reporting to our investors while providing us with a platform that supports the continued growth of our business,” said Adena Friedman, chief financial officer with Carlyle.

The technology will also allow Carlyle to track more macro-level information about its portfolio companies, including the number of jobs created in specific geographies. “This will better enable us to demonstrate the significant and positive impact our portfolio companies have on the economies in which we invest,” Friedman said.

The company’s technology replaces “a manual process that’s spreadsheet driven, with an automated process”, creating a “central repository for all this data that can be used to analyse, slice and dice, report to LPs, use by the deal team to evaluate individual performance” and also can be used as a “post-investment portfolio management platform”, according to Hank Boggio, chief marketing officer with iLevel Solutions.

The company was founded in 2009 by former IT professionals with The Blackstone Group, which had a need to upgrade the process of manual data collection, according to iLevel’s web site. Blackstone’s management and IT team launched the first Portfolio Management Platform for internal use in 2006.

Beyond the practical necessity of upgrading outdated processes, regulatory requirements and the changing needs of limited partners have made quicker, clearer and more robust GP reporting an essential requirement for private equity managers.