Private Equity Firm Confidently Responds to SEC Exam with Ontra's Insight

Confident preparation for SEC exams

Streamlined side letter management

Quick access to precedent for comparison

“I don't think we could have been as effective in our response to the SEC without these obligations documented in Insight.”

 

Challenge: The need for increased information accessibility as a growing firm

This private equity firm focuses on investing in middle-market companies, with a track record of successful value creation, and manages $4 billion in assets. Despite their long tenure, the firm has maintained stability with a consistent group of founding partners.

As a longtime customer of Ontra’s Contract Automation, they were introduced to Ontra’s Insight early on and didn’t find an initial need for the product at their firm.

Only as the firm expanded and recognized the growing need for improved visibility into fund and side letter obligation management did they consider Insight. With lean accounting, finance, and compliance teams, the demands on their legal operations became overwhelming.

Before implementing Insight, the firm relied on a compendium provided by their counsel, featuring a full summary of side letter terms. Over time, they accumulated numerous hard copies and PDFs of LP’s side letters, often marked up in different ways, making it challenging to ensure they were referencing the most up-to-date versions. As a result, the customer sighs, “Invariably you’d end up calling an attorney anyway.”

 

Solution: Enhanced Capabilities for Seamless SEC Compliance

As an established customer of Ontra’s Contract Automation, the firm’s choice to adopt Insight was a natural next step, given the existing trust and rapport. The customer explains, “As side letter obligations became greater and more difficult to manage, it became crystal clear that we needed a tool. And the only people we were speaking to at that point were Ontra. We had full trust in their capability.”

The firm found the onboarding experience seamless. Ongoing support from Ontra throughout the process helped them overcome the learning curve and improve their usage.

The customer gave a glowing review of the Ontra team’s eagerness to jump on a call and solve issues immediately, explaining, “The support is always available to you.”

When discussing Insight’s impact, the firm couldn’t narrow it down to just hours or dollars saved. According to the customer, “It’s not just about savings. It’s about doing a better job, having a better outcome.” Insight also provided 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.”

Anticipating potential SEC exams due to the evolving regulatory environment, the firm recognized the value of preparation. The SEC’s heightened scrutiny of private funds resulted in the increased need for proper procedures and documentation. When the time arrived, Insight enabled the legal team to quickly and confidently address the SEC’s initial requests for all side letters related to their funds and LPs, any log maintained summarizing side letter terms, and documentation of compliance processes.

The firm confidently handed over 35-40 side letters and, thanks to Ontra’s Insight, was able to quickly provide all necessary supporting documentation as well. Their swift response wouldn’t have been possible without Insight. As the customer says, “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 continues, “Zero. Not another question.”

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