More complex client needs as trends accelerate
FIS: Best Portfolio Management Software Provider – As private equity continues to attract more and more capital from existing and new sources like high-net worth individuals, managers must meet the changing investor needs. There has been a rise in asset class cross-over with traditional managers buying private firms or starting closed-end vehicles and private capital firms launching open-ended structures.
“This trend has been accelerated by Covid-19, due to its impact on the debt and lending markets,” comments Shannon Dolan, SVP – Head of Asset Management and Private Markets, FIS. “These developments will lead to operational convergence and a greater need for standards and regulations on the private side. Thus, we see increasing rates of technology adoption to enable the automation, scalability, and data access.”
Client needs are becoming more complex as the market responds to the changing investor landscape and more capital flows into the asset class. With these factors at play, Dolan expects to see growing convergence across the liquidity spectrum which in turn heightens the need for secure, accessible, data throughout the ecosystem.
The topic of connectivity and integration within the private equity industry has never been more relevant. Dolan outlines: “Private equity is known to attract the best and brightest across all functions, and that translates into setting up a best of breed technology framework to support that talent across firm. This best of breed approach creates an integration challenge, to make all of these systems speak seamlessly with each other. FIS understands this challenge and our API strategy to drive openness of our core systems is helping to solve this problem.”
Dolan highlights how the multiple constituents FIS serves, including fund administrators, GPs, and LPs, share some key challenges which revolve around the data needed to effectively source and place capital and create value in their portfolio: “In all cases, clean, accurate, easily accessible data is key throughout their value chain from investors through to the portfolio companies.
“Our Private Capital Suite with the GL and allocations engine at its core is fundamental to creating and managing accurate data on complex fund structures, detailed partnership capital statements and look-through schedule of investments.”
FIS is also due to release its Digital Integration Hub which will allow clients to connect the FIS suite to other solutions they may use throughout their operation for frictionless data integration.
As the pace of change across the PE industry is expected to accelerate, Dolan underscores three primary evolutions, namely ESG, crypto-currencies and globalisation: “ESG will no longer be a space to watch but will become a performance standard. We’re seeing it already with corporate responsibility officers being appointed at the C-suite level.
“Digital assets will either evolve to become a major asset class or fizzle out over the next year or so. In the meantime, managers are going to test the waters and some will go all in. Finally, I anticipate further globalisation of PE. Preqin’ s research suggests PE will grow substantially faster in Asia relative to developed markets.
“There is an enormous venture community in China, and with the developing African sub-continent, and the maturation of the Middle East markets there is alpha available. As more capital pours into the asset class in search of that alpha, the digital economy, drone coverage, and video conferencing standards, make the world very small and much more accessible.”
Shannon Dolan, SVP, Head of Asset Management & Private Markets
Shannon Dolan is SVP, Business Unit Executive – Asset Management and Private Markets at FIS in New York.