PRIVATE EQUITY: WHY NOW IS A GOOD TIME TO CONSIDER OUTSOURCING FUND ADMINISTRATION
As COVID-19 continues to affect all aspects of life, the global impact on financial markets has been drastic. Private Investment fund managers are being stretched to full capacity in running their portfolios in an extremely unpredictable environment while trying to reassure anxious investors. With the focus on wealth preservation, the benefits of outsourcing fund administration services come firmly into focus:
1. FOCUSING ON YOUR PORTFOLIO
With the markets being so unpredictable, outsourcing the administration elements of a PE fund allows the fund manager to focus more efforts on their core competency i.e. investing their clients’ funds. Fund administrators such as Centaur provide the reassurance and skillsets of a best in breed service while freeing up time and assets for managers to focus on portfolios.
2. INVESTOR DEMANDS
At times like this investors become extremely concerned about performance and are looking for reassurance that systems are in place to properly manage risk remotely. Using a third-party administrator adds credibility to those firms that move towards outsourcing. Maintaining transparency, security and credibility are all part of the services a firm such as Centaur provides in times like this.
3. ACCESS TO TECHNOLOGY
Investors want reassurance that secure systems are in place during this work-from-home period. Spreadsheet risk is a real concern and GPs are growing more serious about offering the long-term reliability and audit trail that is provided by third party administrators. Leading fund administrators, such as Centaur, invest heavily in their technology platform. PE firms can reap the benefits of these systems without the cost and time associated with implementing and maintaining in-house systems.
4. SCALABILITY AND FLEXIBILITY
Outsourcing much of the heavy lifting of a new fund to a third party enables PE firms to expand their business in a lower risk environment. Centaur’s staff are organised into teams, so we become an extension of our clients, making clients more flexible and open to market opportunities.