Gen II Fund Services publishes Fund Administration Technology Report
07 June 2023 US
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Private capital fund administrator Gen II Fund Services has released the Fund Administration Technology Report, assessing industry opinion and highlighting which general partners (GPs) are distinguishing themselves from their peers in the market.
With fund administration complexity increasing, the report classifies 28 per cent of GPs as part of an ‘emerging elite’, adopting “the most sophisticated technology” as a “key differentiator”. The majority of this group (70 per cent) are likely to outsource their fund administration processes.
Half of the GPs surveyed responded that they are “willing to tolerate some risks involved in new technology, as there would be some benefits,” with only 22 per cent stated that they did not want to change their fund administration technology due to the risks involved. However, 78 per cent of this demographic believe that they will fail to get ahead in digital transformation.
The report states that digital maturity and advanced technology provisions play a part in institutional investors’ decision-making processes when choosing a GP. Some 19 per cent of GPs believed that LPs are a lot more likely to invest with a fund sponsor using automation in their fund administration. In reality, 36 per cent of LPs reported that this was the case. For institutional LPs, this figure rises to 48 per cent.
The report’s conclusions come from an online survey of LPs and GPs in private equity, conducted between November and December 2022.
With fund administration complexity increasing, the report classifies 28 per cent of GPs as part of an ‘emerging elite’, adopting “the most sophisticated technology” as a “key differentiator”. The majority of this group (70 per cent) are likely to outsource their fund administration processes.
Half of the GPs surveyed responded that they are “willing to tolerate some risks involved in new technology, as there would be some benefits,” with only 22 per cent stated that they did not want to change their fund administration technology due to the risks involved. However, 78 per cent of this demographic believe that they will fail to get ahead in digital transformation.
The report states that digital maturity and advanced technology provisions play a part in institutional investors’ decision-making processes when choosing a GP. Some 19 per cent of GPs believed that LPs are a lot more likely to invest with a fund sponsor using automation in their fund administration. In reality, 36 per cent of LPs reported that this was the case. For institutional LPs, this figure rises to 48 per cent.
The report’s conclusions come from an online survey of LPs and GPs in private equity, conducted between November and December 2022.
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