Private Equity International’s annual special report explores how the fund services market is responding to LPs’ and GPs’ changing needs
Investors are stepping up their scrutiny of managers’ back-office operations like never before, piling on the pressure when it comes to fund accounting and reporting. Coming amid macroeconomic headwinds, rising retail investor appetite for PE, rapid technological change and a grim fundraising environment, it’s no wonder GPs are increasingly considering outsourced – and co-sourced – options to ease the burden.
Key trends in fund services amid volatile environment
Geopolitical and macroeconomic uncertainty, alongside evolving regulatory demands, are prompting GPs to reassess their back-office models.
Scrutinising the specifics of the back office
LPs conducting due diligence on private equity managers are delving into the detail of back-office operations and funds’ third-party administrators.
PREVIOUS COVERAGE
Managers are increasingly turning their attention to their middle- and back-office processes to ensure their businesses are ready to maximise opportunities when the private equity market rebounds. In this special report, we take a look at the challenges managers face when it comes to optimising their fund structures to attract retail capital; how GPs and service providers are navigating new rules from the US Securities and Exchange Commission; and why co-sourcing is increasingly appealing to managers, plus much more.
Three key trends in fund services
To take advantage of new opportunities in a tight market, the PE industry is getting its fund services processes in order.
Navigating retailisation’s back-office challenges
Firms may have to rethink their operating and accounting models if they want to embrace the potential of private wealth.
Alter Domus on leveraging the power of technology
Private equity firms are increasingly turning to tech solutions to support everything from investor onboarding to portfolio management, says Tim Toska, global head of private equity at Alter Domus.
Citco Fund Services: The powerful benefits of data transformation
Having a sophisticated data transformation strategy in place can help GPs execute timely data-driven decisions to better support the generation of alpha and enhance the client experience, says Jared Hoffman at Citco Fund Services.
The integrated approach to outsourcing
GPs may appreciate the value of outsourcing, but they want service options that are as integrated with their own operations as possible.
RSM US: Get ready for more regulation
Managers should look to adopt more flexible and scalable operating models to prepare for the new Private Fund Adviser Rules and investor demand for greater transparency, say Alex Bradford, Louis Crasto and Adam DePanfilis at RSM US.
Incoming ESG regulations cause ‘angst’
As climate disclosure and reporting regulations from the EU, the SEC and the state of California come into force, three regulatory experts discuss the quandaries for investors that need to comply.
CFOs on the advent of AI
CFOs are exploring how artificial intelligence could transform their asset classes.
Vistra on reimagining private equity operating models
The macro environment is creating undeniable challenges for private equity. But it also provides an opportunity for the industry to rethink its operating models, says Vistra’s Abdel Hmitti.
An uphill struggle: Private funds prepare for new regulations
Managers and their service providers may be struggling to interpret new rules governing private funds, but they’re already gathering the resources for the massive new workload.
On the minds of CFOs: Dorothy Walter of Alpine Investors
Which back- and middle-office issues are front-of-mind for a chief financial officer? Dorothy Walter, a partner and CFO at Alpine Investors, shares her thoughts.
In 2023’s report, we examined how GPs are looking to improve data collection processes to keep up with demand, with some turning to third-party service providers, technology investments and new talent to streamline their operations.
GPs get their houses in order as new regs and LPs up demands
Private equity has been the target of increasing regulatory scrutiny in recent years.
Alter Domus: Why advanced tech is the future of private markets
Firms that integrate advanced technologies into their investment decision-making processes will be better able to compete in the alternatives marketplace, says Alter Domus’s global head of data and analytics products, Gus Harris.
How private equity is readying for more regulation
A raft of regulatory changes coming down the line means fund managers are needing to rely on third-party providers more than ever.
RSM US on demanding more from third-party providers
Private funds must rely on fund administrators now more than ever as the outsourcing landscape becomes increasingly fraught, write RSM US’s Christa Clark and Louis Crasto.
Treading the data management balancing act
Managers are revamping their data management processes to cope with intensifying LP demands for better, faster reporting. Can technology and third-party providers help to relieve the burden?
Citco UK: Getting to grips with data
Good data management can streamline operations, improve risk management and help firms differentiate themselves from their peers, says Sam Metland, executive vice-president and head of private equity product at Citco UK.
Making tax an essential part of ESG
Investors are increasingly scrutinising firms’ attitudes towards tax as an indicator of their wider position on ESG matters.
Apex Group on the transparency premium
Maintaining a high level of transparency within a business represents a value-add proposition in the current PE environment, say Apex Group’s Agnes Mazurek and Georges Archibald.
In 2022’s Fund Administration report, we examined how managers and GPs are turning to technology solutions to keep up with the demand for transparency within the investing relationship and how outsourcing could help to satisfy the market’s demand for DE&I data.
The key trends impacting fund administration
Increasing disclosure expectations will require fund administrators and GPs to level up on tech, write Hannah Roberts and Louise Fordham
Sanne Group on how PE is supporting Japan’s hidden gems
Overseas PE firms that can overcome the challenges of building business in Japan will be able to capitalise on countless opportunities, says Sakuya Tajima, head of business development in Japan for Sanne Group
Rising to the transparency challenge with tech
LPs looking to use data to understand the vulnerability of their assets in a fast-changing investment environment are calling on technology solutions to stay in the loop.
Alter Domus: How data will transform the PE market
Better data strategies will allow investors to make better decisions faster and cheaper, but the industry is still at an early stage of its data transformation journey, says Gus Harris at Alter Domus
DE&I: Is it time to seek outside help?
As investors ramp up demands for data on diversity, equity and inclusion, outsourcing such requests can offer a sophisticated solution for fund managers – and facilitate wider industry change
Vistra on responding to reporting challenges
GPs are receiving unprecedented levels of demand for data from LPs, as well as an uptick in reporting requests, say Caroline Baker and Scott Kraemer of Vistra
In 2021’s Fund Administration report, we analysed the pressures facing GPs, the tailwinds behind ESG, and the evolving use of technology and data.
Key trends in fund administration
ESG, data and tech are growing areas of focus for private equity firms, and areas where fund administrators’ expertise can add increasing value.
Alter Domus on creating value through data
Timely access to information has become critical for GPs and LPs alike, and the importance of data to value creation is only set to increase, say Tim Toska and Jared Broadbent at Alter Domus
The ESG opening for fund administrators
As ESG issues rise up managers’ agendas, fund administrators are seizing the opportunity to deliver products and services that meet their needs.
Ocorian: Why outsourcing makes sense
Fund managers are increasingly outsourcing administrative operations in order to focus on adding value to assets and investor relations, says Ocorian’s head of alternative investments, Simon Burgess.
Five tips for outsourcing finance functions
From tech requirements to clear communication, here are the crucial considerations for finding an effective outsourcing partner.
SEI: Private markets – Less and less… private?
From non-accredited investors to trading platforms, wider access to private market investments will transform how the industry operates, writes Jay Cipriano, senior vice-president at SEI Investment Manager Services
Automation in fund admin will expand
The robots are already here; the next step will be moving away from individual products and services to holistic platforms.
Firms look to AI to power predictive analytics
Artificial intelligence could offer an array of insights to private equity firms, but first they must be able to access and normalise data.
Sanne: Keeping cybersecurity front of mind
The shift to working from home has changed the type of cyber threats facing fund managers and pushed risk mitigation up the agenda, say Sanne Group’s chief technology officer, Marie Measures, and chief strategy officer, Jason Bingham
eFront: Tech steps up to enhance oversight in outsourcing
Technology is empowering managers to outsource with confidence, say BlackRock’s Ludovic Legrand, director and head of business development for asset servicing, and Iain Robertson, vice-president of business development, asset servicing EMEA.
The due diligence shake-up
Diligencing processes may have been overdue a revamp, and with the pandemic serving as a catalyst, technology has had a chance to come into its own.
How ESG could impact fund domiciliation
ESG criteria are expected to play an increasing role in deciding where funds are based, according to an IFI Global survey.
What Brexit means for fund marketing
An incoming EU directive pertaining to third-party pre-marketing activity could exacerbate the challenges facing UK fund managers, say Debevoise & Plimpton's Patricia Volhard, Jin-Hyuk Jang and John Young.
In 2020’s Fund Administration report, we explored the extent to which private equity firms relied on fund administrators, and how embedding technology into working practices looked very different in a post-covid-19 environment, offering up new opportunities for service providers.
Key trends in private equity fund administration
From accelerated tech adoption to an upswing in outsourcing, here are the fund administration themes making a mark in 2020.
Fund administration: The rising tide of outsourcing
Covid-19 could spark a fresh wave of outsourcing that sees little but fundraising and investment left in house.
Cloverlay CFO on managing dual roles and curve balls
Omar Hassan, who was named in PEI's Future 40 Leaders of private equity list this year, discusses the importance of achieving balance and building a trusted network.
SANNE: Due diligence steals the spotlight
Covid-19 will not only impact fundraising, it will also expand the scope and scrutiny of due diligence in the private equity industry, says Jason Bingham, SANNE’s chief strategy officer
Tech lifts off in lockdown
Technology and legal experts explain how the crisis is changing attitudes to tech solutions and protocols, and what this means for private equity.
Intertrust: A ‘new world’ for PE managers post covid-19
Intertrust Group’s CCO, Ian Lynch, talks through the firm’s global survey of private equity managers, which signposts what the industry might look like after the pandemic
Regulatory relief: Risk, rewards and rope
The pandemic has brought both active relief from regulators and greater unknowns and risks for private funds’ compliance teams.
Alter Domus: Beyond the here and now
The shift to remote working may have posed a short-term challenge to private equity firms, but much of the change stemming from covid-19 has yet to come, says Alter Domus CEO Doug Hart
How covid-19 is changing private equity fund administration
The crisis is presenting a variety of challenges for private equity, but fund administrators are quickly pivoting to the new business as usual.
How to avoid a private equity ‘techlash’
Ian Bagshaw and Tim Hickman, partners at law firm White & Case, outline the key cybersecurity risk management considerations for private equity firms.
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