New York, 12th Nov 2020
Des Johnson, CEO of Centaur USA, recently moderated a panel discussion at the annual CFO / COO Private Debt Chicago Conference on the topic “Navigating Complexity and the changing Nature of Backoffice Functions.” The panel discussed changes, growth strategies and the challenges brought on by COVID-19 to the back-office function of fund administrators.
On the panel were Mustafa Tayeb, CFO of MGG Investment Group and Tom Raterman, CFO & Partner of Runway Growth Capital. The discussion, which was streamed to more than 3000 attendees, centered around the changing face of private equity following the COVID-19 lockdown and the experiences of the group.
It was a very constructive session with the speakers focusing on the challenges and opportunities arising from COVID-19. Remote working was the key topic with all speakers agreeing that the industry has proven itself to be resilient and the transition to mobile working smooth. It was agreed that working from home is going to become a long-term reality for the PE industry. As productivity remains steady, the panelists felt that most PE firms will move towards a hybrid environment with some employees working from a fixed location and some working from home. Technology is the critical component that will continue to drive this change.
Des comments, “I agree with the panelists that the back-office function for private equity is changing dramatically and for the long term. This change was already taking place before COVID-19. We could see this with fund administration in how Centaur’s role with PE funds has evolved. Ten years ago, when Centaur was a start-up, the role of the administrator was largely to fulfil the requirements of their clients rather than proactively and positively add value to the fund’s proposition.”
He continues, “Over the years, the role of the administrator has become far more complex due to the increase in regulatory pressures for General Partners (GP), increasingly complex investment strategies and increased reporting requirements from investors. These have all contributed towards the transition of many Private Equity funds to outsourced service providers. When you add the technology developments and acceptance that has come with lockdown, the PE industry is seeing an acceleration in demand for outsourcing as GPs have realized that new technology tools and security protocols can securely bring about greater productivity and cost efficiencies.”