Private equity fund-raising is expected to be more challenging, in the face of a global recession. However, opportunities in real estate and private credit funds are forecast to grow at a fast pace, as progress in technology and services supports this expansion.
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Private equity fund-raising is expected to be more challenging, in the face of a global recession. However, opportunities in real estate and private credit funds are forecast to grow at a fast pace, as progress in technology and services supports this expansion.
“We see opportunities for growth in all segments in alternatives and continue to make the right investments to improve technology and services in each. We believe we will continue to see real estate and private credit funds grow at a fast pace,” comments Jill Calton, EVP, executive director alternative investments for UMB Fund Services.
Against this backdrop, the firm notes how general partners (GPs) have been taking a different approach to fund vehicles. Further, GPs have been looking for alternative sources of growth, income and inflation protection in areas like real estate and private debt. Calton observes this is leading to more innovation in fund vehicles to provide investors with a broader set of distribution channels.
“Liquidity options have changed, and asset managers are looking for administrators that have service solutions to handle the variety and complexity of today’s products,” Calton says.
In the current market, talent retention and technology risk are two of the most prominent challenges businesses face. Calton notes: “The risks of error and omission for administrators is ever present but with highly trained people and the right technology these risks can be mitigated. In addition to macro risk, clients face pressure to keep up with advancing technologies and use technology to connect with larger distribution platforms. “
As GPs venture into new areas of investment, and regulators and limited partners (LPs) demand greater transparency, the amount of data these firms need to handle has grown exponentially. In view of this, UMB believes data standardisation and aggregation will be one of the most impactful drivers of client demand in the coming year. Calton says: “Asset managers are looking to streamline and centralize information pertaining to their investors and funds. Fund administrators need to work with clients to provide information daily in a format that can be ingested by a variety of platforms.”
Calton further adds that responding to regulatory requirements now and being prepared for potential changes in the future is largely supported by accessibility to data and the ability to extract and put that data to use.
The growing focus on environment, social and governance factors also contributes to the proliferation of data. LPs and regulators have been prioritising this approach to investment and in, turn, GPs and service providers are ensuring these principles sit at the top of their agenda.
UMB has also been demonstrating its efforts in this regard. “We care about our customers, our associates and our communities. Because we care, we do our best every day to deliver on our promises and meet the ever-evolving needs of the world around us,” says Calton.
These endeavours include advancing inclusive, equitable and sustainable economic growth and employing strong, consistent and transparent governance practices. UMB has also been using an ESG lens in considering long-term financial sustainability and strategic risk management opportunities.
Jill Calton, CPA, EVP, Executive Director Alternative Investments, UMB Fund Services – Jill leads the alternative investment servicing business of UMB Fund Services, which offers a full range of back-office services for alternative investment funds. Her responsibilities include organizational leadership, strategic development and fiscal management. This includes overseeing the teams that provide fund accounting, administration, investor reporting, tax and audit services for the company’s alternative investment clients. She is a certified public accountant and a member of the Utah Association of CPAs. She also serves on the Hedge Fund Association’s board of directors.
