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The Onboarding Process: A Critical First Step

2nd Oct 2023
Managers of alternative funds should look for an onboarding solution that can improve efficiency and alleviate common pain points.

As the private equity landscape becomes more competitive, it is crucial to improve efficiency in middle and back-office processes in order to keep costs down. At the same time, investors and their advisors, faced with more choices than ever before, expect an ease of service that isn’t always achievable without a large staff.

This is why third-party fund administration has become favorable for funds of all sizes that want to compete in a competitive fundraising market. An experienced partner that can ensure efficiency will be able to enhance the investor experience without increasing costs or taking managers’ attention away from more important duties. Nowhere is this more apparent than in the onboarding process, the critical first step that can help forge lasting relationships with investors if done correctly.

The importance of a dedicated team

Controlling costs is crucial for new funds to reach their goals, which is why so many fund managers look to keep administrative costs low. Saving on overhead is a good thing, but not when it produces errors or harms a manager’s reputation by offering a poor experience to investors. An experienced third-party administrator can establish practices early on that will improve efficiency from day one while also avoiding the errors that may arise from self-administration.

One thing that sets JTC apart from other third-party administrators is our “One Team” approach. Many fund administrators offer compartmentalized solutions that operate in silos: their teams are independent and don’t communicate with one another, so if you have an issue, you have to track down the appropriate team and hope they’re familiar enough with your fund to solve the problem quickly, which may be difficult if you’re at the beginning of your fund’s life cycle.

JTC’s U.S. Institutional Client Services team takes a different approach, assigning a dedicated team with a single point of contact, so you’ll always know who to call when there’s an issue. Team members from all departments work together to offer coordinated solutions to problems. This spirit of collaboration, focused on the specific needs of a particular fund, can result in a deeper understanding of how best to service that fund’s unique challenges.

By offering a dedicated onboarding team, the right third-party administrator can bypass some of the growing pains of the onboarding process, offering experience and proven strategies. Because our onboarding team’s sole focus is setting up every client and efficiently servicing their needs for the life of the relationship, we can help you build your infrastructure from the ground up.

Managing data from a variety of sources

When a new fund is onboarded, the first set of challenges can arise from the data itself, both in the volume of data and the diversity of its sources. Because each fund is unique, the fund data to be onboarded can come in unpredictable increments and different formats, ranging from spreadsheets, databases, commercial general ledger systems, and more. Some funds even keep records in hard copy formats. As a result, bringing both financial and non-financial data from disparate sources into a new system can be a difficult, time-consuming, and resource-intensive task.

The ideal solution replaces labor-intensive manual effort, creates efficiency, and develops and implements best practices. Administrators with a dedicated onboarding team have the experience to accommodate the different needs of different funds. Seasoned administrators can identify which products to use and which products to create depending on the situation. Implementing a technical solution from an established provider enables increased accuracy, lower costs, and faster time-to-market.

At JTC, we use a data-centric approach that can work with many outside systems. Instead of forcing funds and their investors or RIAs to adapt to us, our system is flexible so you don’t have to worry about fitting with it. Our data-centric architecture can successfully complete the onboarding process in just a few weeks while also increasing accuracy by employing the latest technology. This increased speed and accuracy will only help your relationships with investors, who can get through the process quickly and gain access to the information they require on-demand.

Making investors feel secure

A major component of a fund manager’s job is keeping investors happy, as those will be the sources of capital for future funds throughout a manager’s long career. Those investors will be judging their experience from the very beginning, so it’s important to get off on the right foot. Through our deep experience as a fund administrator for funds of all types and sizes, we’ve discovered that what investors look for can be boiled down to security, transparency, and compliance.

Investors want to know their information is secure, and have access to fund and project information when they desire it. That’s why JTC offers a password-protected online portal that provides 24/7 access to fund information and key documents as well as full audit capabilities.

Our systems are built to provide cybersecurity protection and can identify and fix inconsistencies quickly. We also subject our processes to independent compliance examinations and provide AML/KYC services so investors can be sure the fund is complying with applicable laws and that their funds and information are secure.

A partner who cares about your success

When handing over some of your processes to a third party, you want to feel that they have your best interests in mind. At JTC, we pride ourselves on our ability to grow with our clients, so that when we work with a fund, it’s the start of a long and prosperous relationship.

We have the experience to understand what new funds need when it comes to the onboarding process, the technology to help with data management and information security, an online platform providing transparency for investors and their advisors, and tools to help with the specific reporting concerns of specialized sectors.

Most importantly, we offer customizable solutions that increase efficiency by eliminating unnecessary costs. You can get the services you need at each stage and add others as you go, without paying for things you don’t need. By growing with you, JTC aims to improve not just the onboarding process, but fund administration throughout the life of this fund and whatever you may have in store in the future.

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