Meet two of Gen II’s administrators

This article is sponsored by Gen II.

Countless surveys and research reports have shown that outsourcing fund administration is a widely accepted practice, and in many scenarios, even encouraged by LPs. No GP is pining for the days when they had to do it all in-house, and it’s a testament to the fine work of service providers that their value proposition was so clear, and so hard to resist. From a distance, fund administration might even look easy.

But a closer look finds those service providers wrestling with the human capital and technology issues, juggling competing LP requests and a myriad of compliance changes. Any internal finance staff that had to handle their funds and management company all by themselves will attest to the burden involved. Still, as outsourcing becomes standard operating procedure, it will be easier for managers to discount the trouble they are keeping off their desk by outsourcing.

So we decided to take the time to check in with two professionals who are doing that work right now: Gen II’s managing directors Luis Gutierrez and Dautanya Strachan. They are currently focused on driving the firm’s effort in administering to management companies, but their experiences say a lot about how the industry has changed and where it might be going from here. It’s also an excellent reminder that outsourcing administration, for all the technology involved, is still a process managed by actual people. For now, anyway.

How did both of you land at Gen II? What was your professional experience before? 

Luis Gutierrez: I started my accounting career during college at an advertising talent payment agency, where we paid talent for commercials and other similar projects. So I was kind of a junior accountant already while going to school. I didn’t go the traditional audit route.

A lot of recruiters from the Big Four firms at the time come into colleges, and my time working as an accountant allowed me to have more sophisticated conversations with those firms and learn about paths that don’t run though audits.

And so after I graduated I joined the financial services division of AIG. And it’s there that I got my first taste of management company accounting, which has honestly been the focus of my entire career. This position was an incredible learning experience where I was able to see the full suite of activities, the chart of accounts, trial balances and such. And I was there for roughly five years, which included seeing the company through the challenges of the global financial crisis.

From there I moved on to serve as a corporate accountant for an investment manager called VanEck. That was my first direct experience with fund administration, although it was for mutual fund ETFs, not private equity. But it also exposed me to service providers like the State Streets and SS&Cs of the world. Still, it was a position that kept me learning and executing on management company accounting.

When the opportunity from Gen II came along, I hesitated. I’d not heard of the firm, and only heard of private equity in passing. I argued that I only had management company accounting experience but thought it might be time for something new.

Then in the interview I learned it was to help in the management companies of PE firms, and everything fell into place. Now I’d be able to serve clients, as opposed to staying in that back office for a single enterprise. And working with my clients has made the last six and a half years the most rewarding of my career.

My background ended up serving me well, even if I’d never read an investment management company document for private equity before. In the mutual fund world, funds close every day, instead of every quarter or month, so the pace is so much more hectic. But private equity keeps me on my toes in any number of other ways, and leading a team through the pandemic has helped me grow in countless ways.

Dautanya Strachan: I developed an interest in accounting when I was first introduced to the fundamentals of the subject in high school. I studied accounting in college and worked as an accounting tutor, which helped me to stay in touch with the fundamentals while helping my fellow students.

I landed a role in the field of accounting right out of college in the aviation industry working for a leading global provider of outsourced aircraft and aviation operating services. I moved into the retirement asset management industry working for a provider of retirement plan and fiduciary outsourcing solutions.

These roles provided me with hands-on experience in corporate accounting and financial reporting, and ultimately prepared me for my new life in private equity management company accounting.

I started at Gen II as a senior accountant. Gen II’s growth to becoming the largest independent private equity fund administrator provided opportunities for my own growth to advance to my current role as managing director.

In your experience, how has management company administration evolved over your tenure? 

DS: CFOs want to be much closer to their data. They want to get a real play by play of activities to know the financial position of the business at any given period. Private equity CFOs are tightly managing and monitoring their cash. We see more management companies accepting third-party investors, which creates new reporting requirements and often sparks more auditory requirements for the management company.

Technology is becoming a bigger part of everything we do, from accounting to screenwriting, so I have to ask, does that diminish or increase the need for skilled, highly responsive client services? 

LG: There is no doubt that I’m spending a great deal of my time exploring the most cutting-edge technologies to automate everything we can. I tell my team, we can’t afford to fall behind, or wait for 10 clients to show up on a single day to be aggressive in using tech to manage our workload. But in the same breath, I know cultivating close, open relationships with all our clients is an equal priority.

Let me give you an example. I had a flight canceled this summer, at midnight the night before it’s due to take off. So I hop on the service line trying to find out what’s happening and noticing all these other flights are getting canceled as well. Can I even find another flight? And who am I talking to at 1am? A chatbot. That only added to the stress, when a live person could have walked me through my options and left me prepared to find that plan B or C.

So much of our job is ensuring that for our clients, there is a human voice on that line. Think about it. The more we rely on our tech solutions, the less equipped we are when they falter. That’s when a human being can step in and help give context for the situation and devise alternatives.

I can’t tell you what the next big leap in AI or machine learning will be, but it’s certainly going to still take a real person, who went to college, and is trying to get a flight, to step in, pick up the phone when it rings and apply everything they learned to fixing that problem. That’s our job. And that’s why we’ve enjoyed the success we’ve had so far.