Private equity fund administrators are moving beyond core accounting tasks toward becoming critical hubs for systems and functions firm-wide as their fund manager clients face increasingly complex data demands from investors, regulators, and new product initiatives.
The march is on to take basic fund and investor account data and use it as a foundation for larger, centralized databases directly flowing into other business purposes as varied as valuation, performance analytics, fee calculations, risk management, forecasting, custody, taxes, and deal management. And the expectation is that any one piece of data will flow cleanly through all functions – and be updated and linked through each transaction and step – in an effort to maximize efficiency and make these systems less of a business headache, says Bill Salus, CEO at Paddock Consultancy.
“Managers are facing mounting costs to build more creative strategies and comply with regulations and manage their infrastructure,” he says. “It’s cutting into their margins and limiting their effectiveness – and their profitability and competitiveness.”
Fund managers will now look to administrators to solve not just for the accounting needs around a particular investment product, but for their larger business information management needs, Salus says. It’s logical that the search starts at the initial data around capital coming in from investors that is invested in assets, he says.
“The trend is to manage that data in a way to have integrity across a platform and deliver across any functionality and capability you need it to do,” he says. “For the modern administrator, that’s where the puck is going.” Read More