Private Equity Firm Confidently Responds to SEC Exam with Ontra’s Insight
35+ side letters centralized in Insight
0 follow-up questions from the SEC
Single source of truth for investor obligations
“I don't think we could have been as effective in our response to the SEC without these obligations documented in Insight.”
Overview
This New York-based private equity firm with $4 billion in AUM has been around for over 15 years, investing in middle-market companies and demonstrating a successful history of value creation. The firm’s expertise spans sectors including healthcare, financial services, business services, and consumer products, and it employs a hands-on approach, collaborating closely with management teams to drive strategic and operational enhancements.
Challenge
A growing firm needs information to be easily accessible
This private equity firm has a long tenure and a track record of successful value creation, and it maintained stability over the years with a consistent group of founding partners. However, as the business grew, the organization maintained lean accounting, finance, and compliance departments, and the demands on legal operations became overwhelming.
The firm had traditionally relied on a compendium provided by internal counsel, including a full summary of side letter terms. Over time, the team accumulated numerous hard copies and PDFs of LP’s side letters, often marked up in different ways. The lack of a single source of truth made it difficult to ensure team members always referenced the most up-to-date versions of documents. “Invariably,” the customer sighed, “you’d end up calling an attorney anyway.”
Solution
Insight improves internal consistency and enables seamless SEC compliance
Recognizing the growing need for improved visibility into fund and side letter obligation management, the firm turned to Ontra’s Insight. As a longtime customer of Contract Automation, adopting Insight was a natural next step. The customer explained, “As side letter obligations became greater and more difficult to manage, it became crystal clear that we needed a tool. And the only company we trusted was Ontra.”
The firm found the onboarding experience seamless. Ongoing support from Ontra throughout the process helped the firm get up to speed quickly and ensure adoption. The customer gave a glowing review of the Ontra team’s eagerness to jump on a call and solve issues immediately, saying, “The support is always available to you.”
Results
Saving time and money, improving outcomes
On top of the hours and dollars saved, Insight’s biggest impact was providing peace of mind: “It was about improving the quality and the reliability around each of these obligations to our limited partners. I don’t wake up and worry, ‘Did we forget? And did we screw that up?’ Now I can visit a single source for the information to answer those questions.”
Due to the evolving regulatory environment and the SEC’s heightened scrutiny of private funds, the firm recognized an increased need for proper procedures and documentation ahead of potential exams. When the time for an exam arrived, Insight enabled the firm’s legal team to quickly and confidently address the SEC’s initial requests for copies of all LP side letters, any log maintained summarizing side letter terms, and documentation of obligation compliance processes.
The firm confidently handed over 35+ side letters and, thanks to Ontra’s Insight, was able to quickly provide all necessary supporting documentation as well. The customer concluded, “I don’t think we could have been as effective in our response to the SEC without these obligations documented in Insight.” When asked if the SEC had any follow-up questions, the customer continued, “Zero. Not a single question.”