Insights

From Fragmentation to Automation: Streamlining Document Retrieval for Alternatives with Canoe Connect

At Canoe, we are committed to helping investors in alternative and private markets achieve greater operational efficiency by revolutionizing document and data management. And as difficult as it can be to extract data from the various documents in this space – capital call notices, distribution notices, account statements, K-1s, factsheets, quarterly financials, performance estimates, manager letters and more – locating and aggregating them in the first place is often no less challenging.

Depending on its scale, an investor might work with dozens of counterparties, each one with its own intricate network of filesharing hubs, portals, email delivery mechanisms, and more. This fragmented structure causes firms to source documents from hundreds, if not thousands, of different document portals and other locations, with each one requiring various levels of coordination around permissions, access, division of labor and the like. The result is inefficient workflows, overworked employees and greater risk, especially as alternative and private markets continue to gain popularity.

Enter Canoe Connect – a new solution that transforms document retrieval from an operational burden to an operational advantage. Users gain the ability to automatically collect documents from every source, and access all their documents from a single location, greatly increasing efficiency. Consider it an accelerator for the first mile of data management for alternative and private investors.

To learn more about what makes Canoe Connect such a powerful solution, let’s explore some of the document retrieval challenges that are holding this space back.

Managing Thousands of Portals

The sheer scale of document management for alternative and private markets might be its single biggest point of inefficiency. Specifics vary, but a typical ratio is one unique portal login for every 10 commitments, creating a massive operational burden. Dedicated retrieval teams must maintain huge databases containing the access credentials for each one.

Fragmentation is another issue. While some general partners (GPs) host their own portals, others do so through their administrators or independent portal providers, and still others leverage alternative means such as document sharing tools and email blasts. With so many touchpoints, this mode of document retrieval is a time-consuming, error-prone process.

Changing Passwords and Multi-Factor Authentication

Portal fragmentation causes enough problems on its own, but throw ever-shifting access credentials into the mix and the challenge becomes even greater. In just a few short years, our proprietary research demonstrates that the number of GPs using document portals has increased sharply, becoming the dominant model. That means investors need to store and access hundreds upon thousands of login credentials and passwords, as well as periodically create new ones to comply with portal requirements.

As if that wasn’t frustrating enough, most portals now require multi-factor authentication (MFA), so it’s not enough to have the right password – users must enter an additional code or complete a prompt as well, which may be delivered via email or phone. These extra steps can be time-consuming at scale, but the real problem is the key man risk they represent. If an operations employee leaves the company without adjusting who the MFA requests are directed to, it can result in logistical hurdles, missed documents and more. That goes for usernames, passwords and security questions as well.

Inconsistent Delivery, Frequency and Structure

Beyond the huge number of portals and the difficulty of maintaining up-to-date access information, inconsistencies among the portals and delivery mechanisms themselves create additional operational friction. While some GPs structure their portals as one flat level of folders, others might have different folders for different funds. In addition, while some GPs send notifications when there are new documents to address, others don’t, creating workflow dislocation. To top it off, while certain types of forms have a regular cadence, others, such as capital call notices, occur on a more ad hoc basis, forcing operations teams to react rapidly without sacrificing accuracy.

All told, our research indicates that it could take an average of five and a half minutes to access a single document from a single portal. Fortunately for investors, Canoe Connect solves these challenges through technology, expertise and shared intelligence.

Canoe Connect: A Unified Solution for Data and Document Management

Canoe Connect provides the piping and infrastructure to enable investors to retrieve essential documents in a highly programmatic manner. This is the result of a high level of integration with GPs, often through automated means such as APIs, saving investors from managing their own bilateral relationships for this purpose.

With all relevant documents available via a single point of access, processes are no longer thrown into disarray by something as simple as a missed email or alert – instead, everything occurs in an automated fashion. There is no need to update internal master lists or accounting systems, nor is there risk of employees clicking the wrong button or accessing fraudulent documents via a bad actor. In this way, clients can move from an antiquated, highly manual process to a truly modern workflow defined by endless scalability.

Each one of our clients is highly capable on its own, but combined, they create a level of scale that unlocks unprecedented intelligence. While individual firms might understand the document retrieval process well enough to get by, they often have a limited view of how others have reduced operational friction with particular GPs, strategies for securing more documents with the same number of integrations and the like. Our work with a wide range of stakeholders enables us to establish the widest possible context for document retrieval.

Similarly, the size of our client base means that when we approach GPs about a potential document portal integration, they listen far more closely than they would to a typical firm on its own. This power of the collective informs much of what we do.

Finally, no tool stands alone, and ours are no exception. Efficient document retrieval is a critical component of alternative and private investment operations, but it’s all for nothing if employees are then forced to read through each document with a fine-toothed comb. Our technology leverages AI and machine learning to extract key information from the documents, saving operations staff from spending their days finding the data needle in the document haystack and rejiggering massive Excel spreadsheets.

These extraction capabilities may be distinct from Canoe Connect, but having a single point of access to solve multiple workflow challenges is a powerful draw for operations staff, translating into greater efficiency and cost savings.

Conclusion

Compared to addressing the numerous documents that alternative and private market investors receive, collecting them in the first place may feel like an afterthought at times – but it is no less important. By leveraging systems like Canoe Connect, investors can unlock robust integration, unprecedented efficiency, collective intelligence and unified workflows, enabling greater control over their operations and an enhanced ability to meet the growing scale of these asset classes.