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Survey: LP Reporting and Automation in Venture Capital and Private Equity Funds.
- Päivi x riskrate
- May 12
- 7 min read
VC/PE fund sizes are growing in Europe, increasing the need for automation. In April 2025, we interviewed 15 venture capital (VC) and private equity funds to understand current practices, key challenges, and opportunities for automation in LP reporting.
An LP report is a quarterly update by a fund manager (General Partner) to its LP (Limited Partner) investors. It includes key financial data, fund performance, portfolio company updates, capital calls, and profit distribution details. The LP report builds trust between the fund manager (GP) and investors (LPs).
In April 2025, we interviewed 15 professionals from the venture capital and private equity industry to explore the sector’s outlook, best practices in LP reporting, key challenges, and the opportunities offered by automation and artificial intelligence.
A heartfelt thank you to all the venture capital and private equity professionals who generously shared your valuable insights for our survey. We hope these findings will help the industry and its professionals make faster, better-informed decisions, saving time and money, while supporting economic growth across Europe.
Key Findings
In Finland, the average size of a venture capital (VC) fund is around €70 million, while in Europe, the average fund size reaches approximately €130 million. Consolidation is already underway in the European VC market, with smaller funds merging, which increases assets under management and intensifies the need for automated LP reporting.
Artificial intelligence (AI) and automation can significantly ease professionals' workload in private equity and venture capital firms. When data collection and the calculation of key performance metrics for LP reporting are automated, experts can focus more on analyzing fund performance and forecasting future outcomes.
This interview-based study aimed to understand how General Partners (GPs) currently manage Limited Partner (LP) reporting and whether automation could bring added value to the reporting process. The interviews explored how GPs collect data from portfolio companies, calculate fund-specific financial metrics, and prepare and distribute LP reports. ESG reporting was briefly discussed but excluded from the main scope of this research.
VC/PE fund sizes are growing in Europe, increasing the need for automation.
All interviewed GPs use Excel to collect fund cash flow data and create LP reports.
95% of GPs use Excel to collect data from all portfolio companies and prepare LP reports.
80% of GPs noted that the LP report’s visual branding and layout are important.
Fund sizes are growing in Europe, which may increase the need for automation.
Manual reporting becomes burdensome with over 30 portfolio companies.
Accessing data from portfolio companies was a major bottleneck for a GP.
Waterfall calculations require time-consuming data consolidation and verification.
Calculating investor-specific performance metrics requires special focus and time.
Automation saves time when GP is managing more than 3 VC funds.
Most respondents had explored one or more LP reporting automation tools.
Most respondents prioritized ease of use, affordability, and responsive customer support.
Automation must handle various fund agreements and enable easy data validation.
Conclusion
While AI and automation can offer clear benefits, LP reporting automation delivers value only when GP professionals can trust that the underlying data and KPIs are accurate, consistent, and complete.
LP reporting automation should be transparent and flexible to handle diverse fund agreements, reporting frequencies, and investor preferences.
Begin LP reporting automation with a few repeatable tasks, like capital calls, management fees, KPI tracking, or portfolio company reporting. Gradual onboarding reduces risk and helps GP teams adapt with minimal disruption.
Ensure the LP reporting automation tool can export data into Excel, Power BI, or other visualization tools, supporting both flexibility and branded LP reports.
Question 1.
What is your LP reporting platform?
In the Riskrate survey, the LP reporting platform refers to a platform where all the information needed for investor reporting is gathered in one place. LP reports are based on the GP's operations: realized cash flows and estimates of the unrealized investments (like the status of portfolio companies). In practice, GP funds' cash flows consist of capital calls, management fees, fund expenses, capital returns from portfolio companies, and profit sharing defined in the fund’s Limited Partnership Agreement (LPA). LP reports are typically prepared quarterly and delivered to LP investors within 60 days of quarter-end.
In the interviews, 100% of GPs said they use Excel/Google Sheets as their reporting platform. Excel/Google Sheets is a cost-effective tool that can be customized to match the tailored profit distribution model defined in the fund’s LPA (Limited Partnership Agreement). In some cases, the profit distribution model may even change during the fund's lifetime, for example, when late investors join after the initial closing.
Several GPs mentioned that the waterfall (profit distribution) calculation in Excel required special effort. Accuracy is crucial since all necessary waterfall data is maintained in Excel and is often interlinked. A single waterfall calculation in Excel can contain hundreds of transaction rows across multiple sheets, and a minor error may affect the entire calculation.
The waterfall transactions include capital calls and profit distributions, and their calculations are based on the fund's profit-sharing model (defined at LPA), like carried interest, hurdle rate, catch-up mechanism, and management fees.
How to automate?
Data transfer and validation between systems cause stress and add manual workload. Centralizing all data in one place for LP reporting saves GPs time and makes verification easier. With LP reporting automation, GP should be able to efficiently run and calculate all fund operations (including capital calls, management fees, and waterfall distributions) in one place and get answers to detailed questions, for example, with an AI chatbot.
Question 2.
How do you handle capital calls and profit distributions?
In a venture capital or private equity fund, capital calls refer to requests for committed LP investor funds to finance investments, while profit distribution, or waterfall, outlines how returns are allocated among LP investors and GP fund managers.
Many LP investors require the capital call (or profit distribution) notice to be sent to multiple email addresses (e.g., investment director, back office, middle office), so the majority of GP interviewees said they send capital call notices to LP investors via email, with the invoice as an attachment. A minority of the GP interviewees said they send capital calls via e-invoice from their accounting software, with a detailed PDF attachment. The e-invoice with a reference number helps automate reconciliation.
Profit distributions to LP investors are transferred from the venture capital fund’s bank account to the LP investor’s bank account, and a breakdown is emailed to the LP investor (to one or several recipients). These calculations are done in Excel and follow the fund’s LPA (Limited Partners Agreement). Paid capital calls and profit distributions are accounted for in Excel, as all this data is needed for LP reporting and affects waterfall and metric calculations.
How to automate?
With LP reporting automation, GP should be able to efficiently run and calculate all fund operations like capital calls and management fees, and send them as digital reports or PDFs via email. Profit distributions could also be calculated with automation. When sending a capital call, a sales invoice is sent to the LP investor from the accounting software. If needed, the integration of the accounting software with the LP reporting automation is possible, and tracking paid invoices would allow monitoring of paid-in capital.
Question 3.
How do you collect portfolio company data for the LP Report?
GPs collect up-to-date data from each portfolio company to give detailed reports that Limited Partners (LPs) expect to track the fund’s performance and understand how their capital is being managed. Update from portfolio companies is also essential for a GP to calculate fund metrics like net asset value (NAV) and IRR.
Based on the interviews, collecting data from portfolio companies was a bottleneck for a GP in LP reporting, especially if there were more than 30 portfolio companies. Problems are because some portfolio companies send in their data late or incomplete, even after reminders and deadlines. This causes delays and errors in the LP reporting. 95% of interviewees said they collect data for all portfolio companies in Excel, either in-house or outsourced. According to GP interviews, managing data for over 30 portfolio companies manually starts becoming slow and costly. Manually entering data and checking formulas across Excel/Google Sheets, and visualization tools adds significant time, effort, and costs to the LP reporting.
Depending on the fund’s stage and focus, the GP collects data from portfolio companies about financial metrics, headcount, cap table, 1 – 5-year forecast, instrument breakdown, and ESG data. The GP’s investment director also provides a narrative assessment of each company’s status and outlook in the LP report.
How to automate?
Raising a new fund can take years for the GP, and the performance of the current portfolio can be crucial to show the traction. Financial traction becomes increasingly important with more mature investments. Gathering and storing data from more than 30 portfolio companies is time-consuming for a GP. LP reporting automation can easily save time and centralize all this data. Portfolio companies could enter data manually or upload general ledger files, enabling automated calculation of actual and forecast metrics (assuming up-to-date bookkeeping). The LP reporting automation could send reminders, automate metrics calculation, answer questions, for example, with an AI chatbot, and offer an LP reporting template that the GP could finalize once all data is in place.
Question 3.
How do you deliver your final LP Report?
An LP (Limited Partner) report is a regular update provided by a venture capital or private equity fund to its investors. It includes key financial data, fund performance, portfolio company updates, capital calls, and profit distribution details. LP reporting helps build transparency and trust between the fund manager (GP) and investors (LPs).
In the interviews, 80% of the GPs noted that they focus on the LP report’s visual branding and layout, reflecting professionalism. Data from Excel/Google Sheets is manually imported into an external reporting tool like Power BI or reporting software. The final LP report is saved as a PDF and sent by email to the LP investor, or LP investors get access to the reporting visualization tool themselves to view or print the report.
How to automate?
Automation can save time for the GP's professional by collecting data and calculating metrics for LP reports. The LP can get access to the LP reporting platform (and get answers on detailed questions, for example, with an AI chatbot), generate a complete LP report as a digital report (with API) or a PDF file. In addition, for the GP, it is important that all data can be manually or automatically (using API) transferred to a branded visualization tool or Power BI.
Conclusion
GP teams emphasized that the key criteria for any LP reporting automation are ease of use, affordability, and five-star customer service. The LP reporting automation must work flexibly across different Limited Partnership Agreements (LPAs).
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