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PE managers recognise the power of their data

UMB Fund Services: Best Fund Administrator – Technology – Private equity is well positioned to take advantage of the uncertainty in the marketplace, with technology forming a firm foundation for these efforts. In this context, PE managers are recognising the power their data holds and their need for accuracy and flexibility in this regard continues to grow as their investors become increasingly sophisticated.

“Once a relatively simple task, fund administration has become a resource intensive and complex activity requiring a higher headcount, greater expertise, and more sophisticated technologies than ever before. We continue to see rapid growth in our private equity business,” remarks Jill Calton, SVP Director of Alternative Investments at UMB Fund Services.

Calton notes how there can be the perception that investor and partner data might be held captive by administrators. This would mean the PE manager can’t readily access and work with the data for purposes such as sales and marketing or advanced reporting and analytics.  

However, this is not the case, especially at UMB. Calton explains: “We are readily able to respond to managers’ data requests and, just as importantly, managers can perform searches, run complex queries and export data. We know that their data is just that—their data. We recognise data is vital for managers and we are always enhancing the ways they can access it.”

“UMB recognised early — more than 10 years ago — that managers would need far more than just “reporting.” That recognition was a leading reason for our decision to build a fully proprietary system, which we maintain with internal software-engineering experts.”

The firm has always had a single, robust system and in-house technical experts. As a result, UMB clients have always been ahead of the curve in the industry with respect to their ability to access and make use of not only reports and document repositories, but the underlying data itself.  

Calton discusses the challenges PE managers face: “More than most asset managers, private equity firms have long recognised the need for playing offense as part of their strategy around fund data. In this sense, “offense” includes using fund data in customised reporting as well as sales and marketing efforts.

“Private equity managers may have tolerated this operational stress longer than most other types of asset managers because they know the value of their data and that the flexible use of it is also important. But many can no longer tolerate risks of errors, operational delays and—to put it bluntly—looking a bit mom-and-pop to their increasingly sophisticated investors.”

By and large, private equity’s ability to adapt and evolve, embrace challenges and create opportunities will be front and centre in the upcoming year. “With the likelihood of remote operations continuing, the ability to adapt and leverage technology to accomplish tasks that were traditionally handled in person is very clear,” Calton advises, “The greater reliance on technology also leads to greater risk and susceptibility to cyber-attacks. Private Equity firms and portfolio companies will increase their focus and management of cybersecurity both internally and with third party providers. In addition, the shift to e-signatures to streamline and automate the process for investor flow and deal flow will become more standard.” 

Jill Calton
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 organisational 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 previously served as a managing director overseeing one of these client service teams.

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