Our expert panel looks at how the specialist fund admin industry is handling issues such as technology and cyber crime, discusses the threat of global competition and lays out an agenda for the year. Chaired by Alex Rolandi.
Jervis Smith (Country managing director, Luxembourg, Vistra)
Lee Godfrey (Managing director, Western Europe, Intertrust Group)
Stéphane Pesch (CEO, LPEA)
Robert Brimeyer (Managing director, Alter Domus Luxembourg)
Christian Heinen (Managing director, IQ-EQ Luxembourg)
Noel Fessey (CEO, European Fund Administration)
Fabrice Mas (Head of PERA, Luxembourg, MUFG Investor Services)
Funds Europe – Within your firms, which is the single most complicated challenge that technology has helped solve in terms of carrying out administration for private markets vehicles? And which technology partner do you use?
Lee Godfrey, Intertrust – The SPV (special purpose vehicle) world has brought more and more into the fund administration space, and bridging that gap is sometimes complex because of the amount of data and the differences between that data.
The proprietary technology we’re using helps us collate this data and make it available in real time. We’re also using robotisation to trawl public media, to validate some of the data points that we’re using in our hedge fund valuations.
Robert Brimeyer, Alter Domus – Probably the biggest challenge we have, working with a broad range of clients, is coming up with solutions that are flexible enough that all our clients can use them. Some of our clients are also trying to automate things and they then encourage their service providers to follow their standard ways of doing things. That is where I see the biggest challenge today. Our client portal as well as our automation initiatives have helped us to solve this challenge to a large extent.
Christian Heinen, IQ-EQ – There are a few and it’s not easy to point out one single challenge. But I would definitely highlight the fact that we have been moving away from mere email exchanges between the administrator and GPs/LPs [general partners/limited partners] and have embraced ways of working where GPs and LPs have direct access to data, increasingly live data. Secure access to and exchange of information is increasingly facilitated by technology.
Noel Fessey, European Fund Administration – The biggest challenge is the human component. As administrators, we’re sitting at the heart of a multi-agency operating model where you have the general partner, the investment process, the auditor, the administrator and other parties. So, providing the client with an integrated, timely service is quite difficult, and not easy to resolve with technology, particularly because people behave in very individualistic ways.
Jervis Smith, Vistra – We look at both the technology required to service our clients, which is multi-faceted, and the internal technology needs to improve the way we go about our work from an operating efficiency point of view. Many specialist fund administration firms are owned, or will be owned, by private equity firms. This makes us very sensitive to the bottom line, and doing things smarter, especially in blending and rationalising the various technologies acquired in our M&A activity.
Stéphane Pesch, LPEA – We see technology as an enabler, as an accelerator of growth and it also makes the private equity and venture capital industries more professional and efficient.
Fabrice Mas, MUFG – It’s hard to single out one challenge when it comes to technology, because the reality is that nowadays everything is about technology, even in our private lives, it’s changing everything.
In the alternative investment asset class, even ten years ago, things were basically run on just Excel spreadsheets. You had accounting software in the middle, but everything was manual and done through the exchange of emails. Nowadays it’s all based around complex data management, and I think what fund managers are looking for in fund administrators is to keep investing in the technology.
Funds Europe – Regarding the ‘real-time’ management of data, is this perhaps where we’re going to see more implementation of blockchain?
Brimeyer – I’ve been very doubtful of blockchain, and people have said that I don’t ‘get’ it, but years later, I still haven’t seen anyone having implemented a meaningful use of blockchain in our industry segment. It’s not that the technology is not interesting, but in our industry, there are still so many more easily addressable areas to be worked on, that I think the jump to use this new technology is just too big for us as an industry.
Fessey – Not one of my customers has come to me and said: “When are you going to give me a blockchain solution?” Nor have their investors, and I speak today not only as an administrator but also as having worked for an asset manager in the past, with particular responsibility for the private asset class businesses that we ran. None of the asset managers’ clients were looking for this, so where is the need?