Alternative Fund Administration Trends Accelerated by the Pandemic and Work-from-Home Environment

One side effect of the COVID-19 pandemic has been to accelerate the adoption of nascent processes and technology. We’ve seen a transformation across industries, whether it’s the surge in online grocery shopping or the expansion of for-pay movie channels.

COVID-19 has similarly accelerated trends in the private fund world, as most firms, including Ultimus LeverPoint, moved to a remote working environment. We’ll assess three trends and their impact.

  1. Increased adoption of outsourced staffing by fund managers
  2. Improved communication and collaboration through Zoom and Microsoft Teams
  3. Increased emphasis and reliance on technology-based solutions

Outsourced Staffing as a Silver Bullet.

Fund managers have long used an outsourced staffing model to assist with fund administration. Some managers co-source while others fully outsource the functions. Still other managers have a fund administrator “lift out” their in-house administration staff.

At Ultimus LeverPoint, we’ve seen how the pandemic, coupled with the work-from-home environment, has accelerated the move to outsource fund administration, with staff illnesses and care-giving responsibilities added to the standard list of outsourcing drivers: resignations, maternity/paternity leave and a desire to shift administration costs to the fund.

We believe managers like the flexibility afforded by outsourcing, which allows them to avoid — or at least postpone — hiring and training replacements in a remote work environment.

Well-staffed fund administrators have the necessary skills and resources to perform outsourced services and be effective “Day 1.” We’ve found the most-commonly outsourced functions to include fund administration and management company services.

Outsourcing examples.

GP 1: The Assistant Controller of a private equity fund manager resigned in the middle of the pandemic. The manager was reluctant to hire and train a replacement in the remote environment. Instead, the manager chose to outsource the functions to Ultimus LeverPoint. Ultimus immediately assumed many of the Assistant Controller’s responsibilities, alleviating the burden on the fund manager.

GP 2:  A fund manager’s Vice President, Fund Accounting took a short-term leave of absence during the work-from-home environment. Knowing that the need was short-lived, the fund manager sought temporary assistance from a provider who required little-to-no training. At Ultimus LeverPoint, we were able to offer an experienced resource to work remotely with the manager’s internal team and step into the Vice President’s role. This short-term secondment offered tremendous benefit to the fund manager.


Videoconferencing is Here to Stay.

It is strange to remember that prior to widespread remote working, few of us were regular users of Zoom or Microsoft Teams. When it came to providing fund administration services to our clients, we did what most administrators did: we spoke with clients by phone, exchanged emails and periodically engaged in person. Fund administration was accepted as a service intended to be provided “remotely” to clients.

Yet with the accelerated, large-scale adoption of videoconferencing, we’ve found that our client relationships have become stronger. The use of video has allowed for high-value face-to-face interactions without the expense of travel. The ability to share screens has proven invaluable to resolve issues, while simultaneously enhancing relationships through more effective communication and collaboration.

Videoconferencing examples.

GP 3: Remote client onboarding.

During the work-from-home environment, Ultimus LeverPoint switched to Microsoft Teams to onboard clients. Our recent onboarding of a West Coast client eliminated travel, allowed for a faster, more efficient process and accelerated relationship building. The result: greater synergy between Ultimus LeverPoint and the client from the onset.

GP 4: Problem resolution via Teams.

In the remote work environment, we — like many around the world — have used the “share screen” function within Microsoft Teams to great effect. Our ability to walk through Excel workbooks on screen has resulted in more positive interactions and faster resolution times.

At Ultimus LeverPoint, we don’t envision a time when we’ll revert to the now-outdated client service model of phone calls and emails alone.

 

Faster Adoption of Technology.

The work-from-home environment has precipitated the adoption of various technologies by fund administrators, private fund managers and fund limited partners. Secure, desk-top and mobile-friendly solutions have become the norm.

Technology adoption examples.

GDPR-compliant electronic document signing.
Electronic document signing has been available for years. But the pandemic accelerated its use.  Limited partners and general partners can sign agreements from most locations using desk-top or mobile devices. As important, electronic document signing-technology routes documents, data, and signatures through back-end systems, accelerating approvals and moving assets. Scanners can go the way of the dinosaur.

Expanded portal capabilities.
Investor portals, too, have been used for many years, initially as a repository for documents and later as an interactive tool. But the trend now is toward greater transparency through on-demand reporting, and drill-down functionality. Fund managers want direct data feeds to enhance communications with investors and provide easy-to-use dynamic reporting.

Ultimus LeverPoint offers an enhanced client portal, through which fund managers and their investors directly access detailed fund and investor-level data and reporting on-demand.


All around us, we see how the pandemic and associated work-from-home environment has accelerated nascent trends. Within fund administration, specifically, we believe the remote work environment has hastened several positive movements that will have lasting impact. First, fund managers have seen the benefits of outsourcing administration-based tasks on a temporary or longer term basis. Second, the use of videoconferencing has enhanced, not harmed, relationships with clients. Third, technology has risen to fill the needs of fund managers and limited partners, no different than how apps have filled the need for online grocery shopping.

Learn more about how Ultimus LeverPoint can assist with your fund administration needs during the work-from-home environment and beyond.

 

12211007   02/18/2021

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