Author: Chris Andraca
This spike in both money and investors has significantly increased expectations around how private funds are managed and administered. Investors expect their alternative investment experience to be similar to what they have with banking & public securities: a digital experience that is informative and easy to use.
Unfortunately, the reality in private funds is not meeting expectations, and this is being felt most strongly by fund administrators. The role and importance of the fund administrator has increased dramatically over just the past 5 years.
In many ways, the fund administrator has become the conduit for the complex interactions between not only the investor and the fund manager, but also for the interactions between the fund manager and other key stakeholders like auditors, attorneys, etc.
Driven by increasing investor expectations, private fund managers are placing greater pressure on their fund administrators to help better service their investors. The clearest evidence of this is that nearly 30% of private fund managers have fired their fund administrator in the past 12 months, as reported in the “Preqin Special Report: Private Capital Service Providers” study that we wrote about here.
With investors in particular, many fund administrators have established an Investor Relations (IR) group to try to better handle communications and interactions with not only their clients, but also with investors.
That said, a new Investor Relations survey on hedge funds from IRHalo shows that investors’ expectations are not being met across a variety of categories including communications and reporting.
There were several insights from the IRHalo study that jumped out at us:
Technology can help fund administrators deliver a better digital experience that makes it easier for investors to:
Investors compare their experience interacting with private funds to the experience that they have accessing their mobile banking & securities accounts.
Fund Administrators need to be the ones to cross the chasm between investors’ expectations and reality.
Our team at BaseVenture is dedicated to being the technology partner that a fund administrator needs to better meet the current & future needs of this dynamic industry. We are their answer to putting the “Investor” back into “Investor Relations”.
Learn more at baseventure.com