To many in the private equity and real estate fund sector, working with an independent fund administrator is rapidly proving to be an attractive alternative to going at it alone. Investor needs have driven increased demand for outsourcing fund administration over the past few years.
Many general partners are evaluating whether outsourcing their fund administration and operations makes sense.
Here are some key questions to ask yourself
1. Does the fund require further expertise and bench strength to accommodate current activity plus future plans?
Many third-party fund administrators such as JTC offers a wide range of private equity solutions that provide expertise and access to key onshore and offshore jurisdictions and provide a broad range of industry expertise such as real estate, aviation, debt, transport, cleantech and technology.
In addition to what a third-party administrator can provide includes a cutting-edge technology systems and specialist understanding of the private equity sector.
2. Does in-house fund administration take attention away from the primary focus of investing funds wisely?
As your fund grows building an infrastructure can take time away and attention away from investing. Underinvesting in back-office resources can stunt growth so to do it properly it can stretch your budget. A third-party administrator provides a predictable cost structure while enabling scalability as the fund complexity grows and new funds are added. Additionally, fund administrators are viewed as independent third-party oversight for fund managers.
3. Is the regulatory and tax environment changing so quickly that it has become extremely important to have processing partners that actively follow the market?
A third-party administrator expands the functionality of a fund’s back office, enabling it to not only meet accounting demands but to also meet regulatory and investor reporting requirements. In addition, outsourcing to an independent third-party fund administration provides all the controls and security that investors are looking for in their operational due diligence reviews.
4. Are you looking for larger and more sophisticated investors?
The best solution is to outsource back-office operations to an independent fund administration.
Less than 20% of institutional investors will make commitments to start-up managers or managers with a track-record of less than two years. As a result, investment managers need to augment their offering to provide institutional due diligence and create the scalability that will enable institutions to make a commitment.
At JTC, we know what it is like to have a complicated structure, investment portfolio, and specific investor needs. We can provide a comprehensive, bespoke and high quality outsourced private equity administration solution, all geared up to ensuring your business can realize its maximum growth potential.
Through automation, efficiency, and a dedicated engagement management team, JTC is able to provide the bench strength and ability to keep up in a changing environment, enabling you to focus on investing. Our focus has been on finding ways to reduce complexity, lower costs, and shorten time to market to enable our private equity and real estate clients to focus less on their onboarding process and more on what they’re good at: making smart investment choices.
Read our Outsourcing Fund Administration in Private Equity: Best Practices whitepaper!