TLDR:
– Private equity firms facing challenges with managing complex compensation and carry plans.
– Many CFOs exploring SaaS technologies to improve operations and efficiency.
Carried interest, a share of profits from private equity or venture capital firms, is becoming increasingly risky in its current form. CFOs at private capital firms are struggling with managing complex compensation and carry plans, especially with uncertainties in fundraising and staffing. Many are turning to software-as-a-service (SaaS) technologies to digitize their operations and improve accuracy and efficiency.
The growing complexity of private capital deferred compensation has compelled firms to invest significant time and resources in managing these plans. Different firms have varying structures for carry and compensation plans, leading to overload for accounting and administrative staff. Transitioning from spreadsheets to dedicated software solutions can streamline calculations, enhance accuracy, improve efficiency, and provide better participant reporting.
CFOs are looking for scalable solutions to overcome challenges in managing complex compensation and carry plans. By leveraging SaaS technology, private capital firms can simplify processes and set the stage for improved operations. Firms that explore innovative solutions today will ultimately achieve the best outcomes.
