WILMINGTON, DE — Clear disclosure around fund-level leverage and liquidity tools would make 90% of limited partners more likely to commit or reinvest, according to a CSC survey that found private capital investors are focusing less on whether managers borrow and more on how those arrangements affect costs, returns and governance.
The study surveyed 300 general partners and 200 limited partners across North America, Europe, the U.K. and Asia-Pacific. It examined how fund finance, liquidity management, reporting, outsourcing, cybersecurity and artificial intelligence governance are reshaping the responsibilities of private capital chief financial officers.
General partners use an average of 2.4 liquidity tools, according to the research. Those structures include subscription credit facilities, net asset value facilities, hybrid financing, continuation vehicles and GP-led secondary transactions.
The findings suggest fund-level financing has become part of the private capital operating model rather than a specialist technique. Investor acceptance, however, increasingly depends on whether managers can explain the economics and oversight behind the structures.
Financing costs were the most frequently cited area where limited partners want greater visibility, identified by 58% of respondents. The effect of leverage on returns and performance reporting followed at 56%.
Investors also want more information about the purpose of borrowing, use of proceeds, liquidity rationale, facility terms, limits and utilization.
“Liquidity tools can create real flexibility for managers, but the operating model has to keep pace,” Marshall Saffer, managing director of Fund and Capital Markets Services at CSC, stated. He added that managers must explain who bears financing costs and how borrowing affects performance, liquidity and governance.
Operational systems have not advanced at the same pace as financing practices, the survey found.
About 63% of general partners identified integrating facility data with fund accounting and investor reporting as a major challenge. Half cited performance attribution and the fair-value impact of leverage, while more than half reported difficulty coordinating multiple facilities and providers.
Those pressures are placing chief financial officers at the center of leverage oversight. Their responsibilities increasingly include connecting financing data with accounting systems, attributing costs, monitoring covenants and explaining the effect of leverage on fund performance.
“LPs increasingly want clear, concise data they can use in their own reviews and decision-making,” Chris Patton, CSC’s regional head of Funds for Europe, the Middle East and Africa, stated.
Patton characterized operational transparency as a competitive issue for fund managers as borrowing and other liquidity tools become more common.
CSC conducted the research with Pureprofile among senior fund professionals. The report, titled “Future Private Capital CFO 2026: How CFOs Are Becoming the Architects of Operational Trust,” focuses on the systems, controls and reporting practices needed to support increasingly complex private capital structures.
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