Novata Alternatives: ESG Data Collection for Private Markets, Honestly Assessed

Why GPs start looking past Novata

The first cycle feels like progress. You had LP requests arriving in inconsistent formats, an analyst maintaining a spreadsheet per fund, and no way to answer a diligence question without three days of chasing. A dedicated private markets ESG platform gives you a metric library, a portal for portfolio companies, and a reporting output that stops the bleeding. Then the second and third cycles arrive and the character of the problem changes. The tool is not the constraint any more. Portfolio company response rates are.

The second reason is duplication. Your operations team already collects financial and operating KPIs from the same portfolio companies every quarter, through a different process, into a different system, with a different deadline. The CFO of a portfolio company is now asked for revenue and headcount in one workflow and for energy use and board composition in another, from the same investor, weeks apart. Nobody designed that. It accumulated. Once someone notices, the question stops being which ESG tool to buy and starts being why there are two collection pipelines at all.

The third reason is definitional drift. LP side letters do not agree with each other. One wants a metric measured across the whole portfolio, another wants it only for controlled positions, a third wants an intensity figure with a denominator nobody else uses. A platform with a curated metric set is a genuine asset until your obligations stop matching the curated set, and then every non standard request routes back into a spreadsheet.

What Novata does genuinely well

Novata was built for private markets rather than adapted from a corporate reporting tool, and that distinction shows in the details. Private markets ESG is not the same job as corporate sustainability reporting: the reporting entity is a fund, the data producers are companies you influence but do not run, ownership percentages change, and holdings enter and leave mid period. A tool that understands attribution, holding periods, and fund level aggregation saves you from a class of errors that generic platforms make quietly.

The metric library is the other real asset. Deciding what to ask, in language a portfolio company CFO can answer without a consultant, is harder than it looks, and a shared definition set means your numbers can be compared against something. If benchmarking your holdings against a peer set is a reason your LPs take your reporting seriously, that peer data is not something you can build. It comes from other people's participation, which no custom system will ever recreate. That is the strongest single argument for staying.

Where it strains

• Collection is a people problem wearing a software costume. Response rate depends on the relationship between your deal team and the portfolio company CFO, on how early in the year you ask, and on whether the request feels proportionate. No portal fixes a request that lands in the middle of an audit.
• Metric rigidity at the edges. A curated set is the point, until an LP asks for something outside it or defines a familiar metric differently. Custom fields exist in most platforms, but custom fields do not benchmark and rarely flow cleanly into the standard reports.
• Two pipelines, one relationship. Running ESG collection separately from financial and operating KPI collection doubles the number of times you ask portfolio companies for data and halves the goodwill you get for each ask.
• Aggregation assumptions you inherit. How a platform rolls holdings up to fund level, handles partial ownership, and treats a company acquired in month eight is baked in. When your LP disagrees with that logic, you are explaining someone else's methodology as though it were your own.
• Per fund or per company pricing. Most platforms in this space price against portfolio size or number of funds, which means the cost curve follows your AUM growth rather than your usage.

Your real options

Switching platforms is the first option and often the right one. Position Green, KEY ESG, Workiva, Sweep and Persefoni all address overlapping parts of the problem with different centres of gravity: framework breadth, carbon depth, disclosure workflow, or private markets specificity. Fund administrators and specialist consultancies will also run collection as a managed service, which is worth pricing if your real shortage is analyst hours rather than software. Switching costs you a cycle of portfolio company re onboarding, which is not trivial, so change for a structural reason and not for a feature.

Staying is the second option and it is genuinely correct for a lot of firms. Stay if peer benchmarking is a reason LPs trust your reporting, if your metric set is stable and framework aligned, if your portfolio is large enough that onboarding companies onto anything new is a project in itself, or if nobody in the firm wants to own software. A private equity firm is not a technology company, and there is no strategic advantage in maintaining a data collection portal that a vendor will maintain for you.

Building is the third option, and the useful version is rarely an ESG tool. The useful version is a single portfolio company data pipeline that collects everything you need on one cadence: financial KPIs, operating metrics, ESG data points, and whatever the next reporting regime adds. One request per quarter, one portal, one set of validation rules, one warehouse behind it. ESG becomes a set of fields rather than a system, which is what it should have been from the start.

When a build pays back

Build when the collection relationship, not the metric set, is your bottleneck. Specific signals: you already run quarterly financial collection from the same companies and want one pipeline instead of two; you have bespoke LP obligations that never fit a curated library; you manage enough holdings that a percentage point of response rate is worth real money; or you want ESG data joined to financial performance in the same query so you can actually say something about the relationship rather than reporting them side by side.

Build also when the output matters more than the input. Firms that produce genuinely differentiated LP reporting tend to be recombining data in ways a standard report generator cannot: fund level, sector level, vintage level, against a bespoke framework, in the house template, with commentary attached. If your team is exporting to a spreadsheet to assemble every LP pack anyway, you are already maintaining the reporting layer manually, and formalising it is cheaper than it looks.

Do not build if you would lose peer benchmarking and that benchmarking is load bearing, if your team has no owner for the system after launch, or if you are pre institutionalisation and your requirements will change completely in eighteen months.

Migration reality

The data export is the easy part. Metric values, periods, and entity mappings come out in a manageable shape. The hard parts are three. First, portfolio company onboarding: every CFO learned one portal and one set of definitions, and asking them to relearn both mid year is how response rates collapse. Time any change to a natural cycle boundary and communicate it through the deal team, not through a system generated email.

Second, historical comparability. If your definitions shift even slightly during the move, your year over year series breaks, and LPs will notice before you do. Freeze definitions across the transition, migrate at least three prior periods, and reconcile the old reported figures against the new system's output metric by metric before you publish anything.

Third, the benchmarking gap. If you leave a platform whose peer comparisons you have been quoting, you cannot reproduce them and you should decide in advance what replaces that narrative in your LP materials. Run the old and new processes in parallel for one full cycle. It is expensive and it is still cheaper than a restated LP report.

Cost bands

Private markets ESG platforms are quoted rather than listed, scaling with number of funds, portfolio companies, and how much onboarding support the vendor runs. Budget the internal side honestly too: chasing responses is where most of the real cost sits, whichever tool you use.

For a build, based on what Digital Heroes typically delivers: a focused collection and reporting layer, meaning a portfolio company portal, validation rules, period management, and your LP report outputs, runs roughly $55k to $130k over 10 to 16 weeks. A full portfolio data platform that unifies financial KPI collection, operating metrics, and ESG on one cadence, with warehouse integration and bespoke reporting, runs roughly $160k to $350k. Hosting is minor. The cost that matters afterwards is having one person who owns the system, and that is a real cost you should name before you commit.

The honest recommendation

Novata solves a genuine private markets problem and solves it in the right shape, which is more than most sustainability tools manage. If your ESG reporting is framework driven, your metric set is stable, and peer benchmarking gives your numbers credibility with LPs, stay and spend your effort on response rates instead. Switch if the platform economics or framework coverage no longer match your fund structure. Build when you are ready to stop treating ESG as a separate discipline and start treating it as a few more columns in the portfolio data you already collect every quarter. That is the version that pays back, and it usually pays back in reduced portfolio company fatigue long before it shows up in a licence saving.