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Fund Administrators: A Rising Force in The World of Private Capital

Fund Administrators: A Rising Force in The World of Private Capital

Dublin / New York, July 13, 2023

In recent years, Private Equity (PE) Managers have driven a remarkable surge in the popularity of debt as an alternative asset class. In the current rising rate environment, private debt is attracting the attention of investors seeking diversification and attractive risk-adjusted returns. As more PE managers include private debt in their investment portfolio, fund administrators are stepping up to help these clients manage this growing asset class.

As an alternative investment, private debt now ranks just below private equity and venture capital in terms of volume. Investors value the extensive range of options, security and flexibility offered by private debt. As a result, PE managers increasingly find that they must offer a debt element to their client base and acquire the right talent to be able to do this successfully.

Fund administrators play a crucial role in streamlining the complex operational aspects of private debt investments by:

  • Leveraging their expertise to handle essential functions such as fund accounting, fund structuring, portfolio valuation, cash flow management, and FX services. By assuming these responsibilities, fund administrators alleviate the administrative burden on fund managers, allowing them to focus on investment strategies and portfolio management.
  • Navigating intricate regulatory frameworks, ensuring that funds investing in private debt adhere to relevant rules and guidelines. By maintaining accurate records, providing timely reporting, and implementing robust control systems, fund administrators instil confidence in investors and regulators alike.
  • Bringing added value through their investor services. Fund administrators facilitate investor onboarding, implement compliance monitoring and generate comprehensive investor reports. These services enhance the investor experience, foster trust, and strengthen relationships between fund managers and their clients.
  • Harnessing technology to supply private debt managers with real-time insights, customizable reporting, and robust risk management tools.

Des Johnson, Global Chief Revenue Officer at Waystone, says “The role of fund administrators in the growing sector of private debt cannot be overstated. Our expertise, operational efficiency and regulatory knowledge contribute significantly to the success and growth of these funds. As the landscape continues to evolve, fund administrators are poised to become even more integral in administering all forms of private capital funds, ultimately benefiting both investors and fund managers.”

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