This should be common knowledge, but at least more and more LPs are finally starting to recognize the limitations of traditional benchmarks and are relying less on them.

Proprietary benchmarks are an alternative to the readily available or GP generated benchmarks but constructing them is often cumbersome and relies on having sufficient high-quality data. As a ‘short cut’ many LPs are starting to use Public Market Equivalent (PMEs) instead.

There is also increasingly broad recognition among LPs that access to first-hand data, that enables deeper portfolio analysis and insights, is far more valuable than relying on data vendors whose databases are of questionable depth and quality.  

Finally, LPs are starting to look at metrics like individual company growth and leverage comparing them against listed companies. This is an interesting development and can potentially provide a nuanced perspective.

Unfortunately, more high-quality data, proprietary benchmarks, and company level metrics and analysis, requires significant resources and effort, which may not always be possible for all LPs.

However, to at least make more informed decisions and possibly drive better risk adjusted returns it is increasingly critical that LPs can do this.

At Balentic we saw this need and we are working on several solutions that will help all LPs to do this and more, faster and cost efficiently.

Some final thoughts: As LPs refine their strategies and reassess their portfolios, the expectations placed on GPs will only grow. Meeting these demands requires more than strong performance; it calls for transparency, alignment, and a commitment to delivering real value.

For GPs, understanding LP needs isn’t just important—it’s essential for building trust and securing commitments in an increasingly competitive market.