PE Tech Report


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Alter Domus: Best Fund Administrator (GPs with assets >$30Bn)

As private equity asset managers forge more strategic relationships with their institutional investor clients, their needs for data and timely reporting are becoming sharper and more essential. The advent of retail participation in the PE space will also herald new challenges. 

The PE space has been growing faster than anyone could have predicted, with the industry witnessing record fundraising growth. This has led to a change in the dynamics of the market. 

“Managers and investors have seen the investment opportunities available and, as a result, the market has been maturing. Some of the larger institutional investors have become co-investors and partner with GPs to provide deals with a lot more capital,” Tim Toska, group sector head, private equity, Alter Domus, outlines. 

He explains how this has led to a more consultative relationship also between the managers and service providers, like Alter Domus: “We’ve seen a greater focus on what back-office operations teams are providing, with this becoming more of a value-add proposition for managers. This part of their business is starting to become a differentiating factor for some of the GPs we work with.” 

The firm has not only been providing GPs with greater levels of data and portfolio analytics, but also doing so in ways for the managers to communicate this information to their LPs. “The investors themselves have become a lot more sophisticated and therefore cannot simply rely on basic information; they need more thorough data,” Toska notes. 

GPs have historically struggled with the disaggregation of data, which has the potential to cripple firms. Toska outlines how technology is helping to break old habits where people would send data over email: “It’s a constant exercise in improvement, to make sure the process of data centralisation and aggregation is streamlined and works well across the whole organisation.” 

Alter Domus is keen to highlight its focus on providing clients with the highest level of service. Toska also stresses the attention the firm continues place on technology and workflow processes over the coming year: “It’s about ‘taking the robot out of the person’ by automating any processes that can free up our people’s time to focus on more value-added work, which undoubtedly leads to greater job satisfaction. In the end, this helps managers increase efficiency and allows our teams to build even closer and more valuable relationships with them.” 

Considering the outlook for the PE industry, Toska observes that the current geopolitical and macroeconomic/inflationary concerns may have destabilised fund-raising prospects. However, despite this, he says: “I still think private equity as an asset class has set itself up for success and will continue to be a front-runner of continued growth.” 

According to Toska, the participation of retail investors in the PE market will be one of the critical drivers of this growth: “This will mean changing the way the industry operates to a certain extent as we adjust to a higher volume of investors. Managers will need to lean on technology and service providers for several elements, such as new KYC requirements and AML processes, and close communication with this new group of clients. This is an area that Alter Domus has been paying close attention to.”  



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