How Asset Managers Can Use Software to Simplify Complex Entity Structures

Private equity and asset management companies involve complex and large entity structures. While this complexity is desired to limit the liabilities and to have the most diversified portfolios, it also presents a challenge to internal teams when they try to find and document correct relationships between their entities.

Today, asset managers need a clear visualization of the ownership structure to optimize their portfolios and provide a clear picture to the board and investors. Below we discuss why visualizing organizational structure is so important and how entity management software can help asset managers simplify complex entity relationships.

How Does Visualizing Organizational Structure Help Asset Managers?

By visualizing the entity structure, asset managers can easily identify and capture various types of connections, including multi-parent and circular ownership, to optimize and run their portfolios. Asset managers need to visualize their entity structure clearly for many other reasons, including increasing transparency, general oversight and presentation purposes.

By identifying clear relationships between their entities, investment firms improve performance, optimize their structures, identify abandoned entities and improve compliance. 

When investment firms present information about their organizations in a visual format, they can tell a clear story of their business which the board will be able to act upon. Last but not least, when entity information is provided in the form of organization charts or diagrams, it delivers a much more effective representation, aided by visualizing the represented data instead of relying on text.

What Are the Challenges With Complex Entity Structures? 

Visualizing complex and large investment structures is complicated due to the sheer size and diversity of the investment portfolio. In many cases, this task is made even more difficult due to inefficient entity management practices.

Even in today's age of digitization, many investment companies still rely on a combination of spreadsheets, paper files and local databases to run their entity management. With such an approach, teams have to spend considerable time searching for answers and struggle to document and find correct relationships between their entities. Moreover, when information is not up-to-date or includes errors, the entire representation gets distorted and falls short of its purpose of simplifying the entity structure and visualizing the ownership.

When asset managers try to reflect the relationship lines between their entities, they often seek more than ownership connections and also need to visualize types of legal entities and their tax structures, jurisdictions, percent of ownership and more. As the organizational structure is constantly changing, the teams have a hard time trying to document and reflect these changes in their reports.

How Can Software Help Create a Clear Picture of the Investment Portfolio?

Today, investment firms have access to an extensive digital toolset which can help them automatically populate their organization charts based on their corporate data and view different types of ownership a lot more clearly. By leveraging entity management software like Athennian, asset managers can simplify most complex entity structures by outlining multiple ownership relationships and reflecting entity data on their org charts. 

Create a Central Source of Truth for all Corporate Data

When organizations switch from spreadsheets to cloud-based entity management systems, they can have all their entity data centrally stored on a secure cloud accessible from anywhere on any device. A single source of truth for all corporate records is a prerequisite for switching from inefficient manual processes to automation and having accurate and up-to-date information on all portfolio entities and limited partners.

 Auto-Populate Org Charts

When investment firms try to draw the entities' relationship lines manually, their teams have to spend multiple hours grabbing required information and transforming it into a visual format which leads to inaccuracies and mistakes. Instead, an entity management system like Athennian would provide asset managers with automation tools with extensive functionality, which allows creating the most complex organizational charts with just a few clicks.

Show Entity Information in a Visual Format

A visual representation of the entity structure provides asset managers, the board, partners and investors with an instant overview of the whole organization, reflecting all connections and providing a high level of detail. For example, the visual elements employed in org charts generated by Athennian software include different shapes for various corporate and tax structures, as well as color coding for jurisdictions. 

The lines in the organization chart can tell ownership patterns and show if the subsidiary is wholly or partially owned by a parent structure. The charting model allows reflecting other information, including entity name, formation date, ID numbers, and further details, which can be toggled on and off depending on the purposes of the presentation.

Reflect Historical Data 

When entity management systems have a date assigned to each data set, it can provide asset managers with an opportunity to capture historical relationships among entities. Such visualization allows to tell the story of the transactions, takeovers, mergers and acquisitions and demonstrate the development of the investment portfolio over time. This functionality eliminates the need to save the old structure each time a new entity is added and allows to have the relevant information at each specific date.

Employ Different Formats for Visualization

With an automated charting module in Athennian, asset managers can split bigger org charts into smaller ones for more effective presentations. For example, it is possible to have charts for various groups of companies, such as portfolio entities or limited partners, or entities belonging to a particular jurisdiction. The teams can zoom the org charts in and out and download the specific sections of the chart in various formats, such as SVN, PNG, or PDF files which can be further modified as needed.

Learn More with Athennian

Modern entity management software like Athennian provides asset managers with rich functionality to ensure visibility and improve collaboration, create transparency for investors and visualize corporate details down to the entity level. For more information about how entity management software can help simplify complex entity structures, please don't hesitate to contact the Athennian team for a free consultation and demo.

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"Very easy to use, modern interface, excellent support. Athennian has an amazing conversion team. They helped us migrate all of our data and the training was very good."

Megan W, Director

“When we were reviewing other entity management systems on the market, in some cases, we were not comparing apples to apples. But with Athennian, there was really no comparison. The paralegals were so excited to come on board.”

Linda Escobar, Senior Paralegal

"There are so many things I like about this program, but the one thing that really stands out is the user friendly interface. The program is fast and allows me to enter corporate information very quickly and efficiently. I would also like to note that Athennian provides the most the fantastic customer service."

Kelly R, Corporate Law Clerk