Red tape may be much maligned by the private equity industry, but for some outsourcers and fund administrators it has been a boon to business. Alongside regulation, an increasing demand for detailed reporting by investors has led many private equity firms to improve their dated IT systems or hand the function to third-party administrators.

In Europe, the Alternative Investment Fund Managers Directive, which is due to come into effect today (July 22) has forced private equity firms to start using specialist software.