Technology has increasingly become the driving force behind the fund administration industry’s ability to innovate and enhance client services across the alternatives industry.
At fund administrator Alter Domus, this has led to a number of key partnerships and acquisitions to support both its proprietary and external technology, as it seeks to address key trends shaping private markets. Some of these include the rise of alternative data sets; rising complexity in cash management and fund structuring; and increasingly sophisticated fund reporting.
On the data and analytics side, specifically, over the last 12 months the Alter Domus team has been focused on providing a front-end view across a lot of the fund-level data for its fund manager clients; not just in private credit and real estate but also private equity and infrastructure.
“We have made significant strides in developing and consolidating our technology offerings and alternative data management services,” said chief commercial officer, Alex Traub.
“Given the increase in capital pouring into the alternative investment industry, we have partnered with Canoe Intelligence to deliver automation and accuracy to data management and we have acquired IEA to facilitate waterfall calculations and GP’s carried interest allocations.”
In Alter Domus’s real estate business, the firm has implemented property management software from Yardi across its global network to enhance the overall integrated solution for real estate managers, mirroring the end-to-end solution it provides to private equity clients via Efront. Yardi’s software platform offers accounting and operational tools for organizations managing real estate portfolios.
The strategic partnership with Canoe Intelligence was announced on November 9 this year. Canoe is a financial technology focusing on the data management challenge. Alter Domus believes it will help it to utilize advanced data capture technology to automate manual workflows for its clients and bring to market the most comprehensive alternative data management solution.
With allocators calling for better transparency and more system-based applications that can support things like automated waterfall calculations, service providers are having to respond in kind, as CFOs and COOs move away from traditional, Excel-based methodologies.
Traub says that over the last 12 months, one of the most pressing issues among private fund CFOs has been the need for their administrators to provide quick turnaround of data and additional transparency into their respective funds. This has acted as a catalyst for Alter Domus to build on, and leverage, its technology capabilities to better support GPs.
Alter Domus administers over $1 trillion assets globally and generates close to 40 percent of its revenues from the fast-growing US market.
As it continues to hone its technology offering, the fund administrator has enjoyed a strong 12 months. In Preqin’s Special Report: Service Providers in Alternative Assets, it was ranked the number one administrator servicing private capital funds closed in Europe between 2019 and the first six months of 2020, and number one for private capital funds closed globally between 2020 and H1 2021 ($100 million-$500 million).
North America is viewed as a key growth driver by the European fund administrator as it aims to achieve number one status there.
Traub sees technology playing a key role in servicing the needs of US managers running funds with $1 billion+ in AUM. Indeed, with fundraising expected to top $1.3 trillion in 2021 across global alternatives (according to Bain & Co.’s latest report), managers are likely to experience increased operational pain points as fund sizes and structures grow.
Fund administrators like Alter Domus are wise to this and explains why they place such importance on their technology offering.
“The appetite to utilize technology has increased more than ever among managers and we are ready to satisfy clients with technology-driven, innovative, and value-added solutions,” concludes Traub.