Fund Administrator Partnership with Quantium

Private markets operations: the co-sourcing model for fund administrators and GPs

The shifting dynamics of the private market fund operations have seen a rising trend towards outsourcing of fund administration. Outsourcing  provides private markets GPs with many benefits such as cost efficiencies, access to specialized expertize, improved scalability, and the ability to focus on core investment and portfolio management functions. 

However, the traditional outsourcing of back-office functions presents certain difficulties. The biggest challenge is the loss of back-office data ownership, leading fund managers to request access to their own data, which can sometimes result in delays. Additionally, the conventional outsourcing approach tends to concentrate on single funds, disregarding the comprehensive relationship perspective of LPs, and occasionally omitting co-investment partnerships or side car funds. As a result, records can be dispersed across multiple locations, making them difficult to keep track of.

To mitigate these issues, many funds evaluate implementing a data management system in-house. Without careful planning, system adoption can introduce complex challenges of its own, such as reconstructing entire accounting journals. The presence of two sets of records often requires additional time and resources for data reconciliation, defeating the purpose of introducing software in the first place.

This is where the “Co-Sourcing” model stands out.  

How Does Co-Sourcing Work?

Co-sourcing is a partnership where clients maintain data ownership and access, and fund administrators manage parts or all of data updates. This framework ensures that clients gain access to best-in-class technology, real-time access to dashboards, reports, and have full control over their data encompassing both their portfolios and investors.

Benefits for GPs or LPs:
  • Data Sovereignty: Clients enjoy transparent and secure ownership of their data, bolstering confidence and operational clarity.
  • Timely Insights: Instant access to data facilitates agile, informed decision-making, streamlining strategy execution.
  • Single Source of Truth: A consolidated data approach assures reliability for investor portal access, eliminating inconsistencies and fostering trust between the GP and their fund administrator.
  • Cost & Operational Efficiency: Co-sourcing eliminates redundant processes and capitalizes on synergies, driving cost savings and operational excellence.
  • Holistic Overview: Along with comprehensive fund data management, this model facilitates a cross-fund understanding of LPs (commitments, DPIs, and even asset-level exposure), leveraging systems like Quantium to enhance investor relations and relationship management.
  • Investor Portal Efficiency: Streamlines the investor portal operations as well as direct access to see investor engagement.
Benefits for the Fund Administrator: 
  • Scalability: Co-sourcing offers an adaptable framework for data management, supporting growth and diversification initiatives.
  • Customizable Workflows: With systems like Quantium, fund administration firms have the flexibility to select specific online workflows or amalgamate tasks such as accounting within their ongoing processes.
  • Enhanced Revenue Streams: By integrating deeper into client workflows, fund administrators can introduce complementary services like real-time portfolio monitoring, ESG and bespoke LP report configurations.
  • Strengthened Client Relationships: The co-sourcing model’s adaptability and emphasis on value addition make it a compelling proposition for prospective clients, deepening mutual engagement.

As an innovative technology provider in the private markets, Quantium understands the unique challenges faced by both fund managers and administrators. Working collaboratively with top fund GPs and administrators worldwide, we focus on the shared objective of delivering superior service to each and ultimately, to asset owners.

At its core, co-sourcing delivers a synergistic model where fund administrators oversee data inputs, but clients retain comprehensive data ownership. Platforms like Quantium can quickly optimize these transitions and integrations, marrying current operational strategies with the co-sourcing ethos. 

1400 717 Quantium Technology

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