Meeting the needs of private equity managers
“It’s about providing efficiencies across asset classes. Whether it’s a limited partnership private equity fund, a FoHFs, a hybrid private equity fund, we offer those efficiencies under one hood, on one platform,” comments Eddie Russo (pictured), solutions consultant at Advent Software on Geneva World Investor, the firm’s integrated solution for portfolio management, investor accounting and servicing.
For private equity firms, the need for system consolidation is starting to grow. Not only are investors becoming more demanding in terms of the level of transparency they require but as the regulatory environment evolves so the need for greater operational efficiency to handle myriad reporting requirements is rising.
In response to the need for enhanced transparency, a few years ago Advent took the decision to merge Geneva – its flagship portfolio accounting and management platform – with its investor accounting platform, which at the time was called Advent Partner.
The result was Geneva World Investor. At its heart lies flexibility; something that Advent paid close attention to when speaking to private equity managers and administrators. To accommodate a variety of fund structures the platform uses an n-Tier fund structure function. This allows for the unlimited creation of entities within a structure including multiple masters, multiple feeders, blockers, AIV’s, SPV’s allowing manager’s to be as flexible as possible as they look to support this ever changing marketplace.
Flexibility is also at hand for managers within the fund structure itself. Different investors might want to participate in different deals and opt-out of others. Geneva World Investor offers the flexibility to provide opt-outs at various levels of investor participation.
“With Geneva World Investor, firms now have the ability to take data from all their front- through back-office functions at the fund level and share it in real-time with investors, providing full investor transparency.
“Investors can see their specific piece of a fund, full balance sheet reports, NAV reporting etc, based on their percentage of capital ownership of that fund. They can see exactly what their P&L is across multiple funds on one platform,” says Russo.
Aside from dealing with enhanced transparency, private equity managers increasingly need better system consolidation.
“Firms today do not want to run five or six different accounting engines, they want to consolidate and will choose the best and most cost effective offering,” asserts Jesper Steiness, director of business development EMEA at Advent.
“This is where Geneva comes into play. Historically, we’ve sat in the middle and supported alternative fund managers and FoFs. Then we branched out into private equity, which is very investor-driven, and into UCITS and mutual funds, which tend to be more workflow-driven.
“We can support firms across all these different asset classes.”
Russo adds that managers who are able to demonstrate to investors that they have full automation are well placed in today’s tough capital raising environment. Investors don’t want to see manual intervention because that puts valuations at risk.
“Ultimately, we want to ensure that firms can use our platform easily. Within private equity the waterfall calculation and carried interest calculation are highly customised calculations that vary from firm to firm. We needed to build a solution that was suitable for the marketplace. Part of that is giving firms the tools to build and make things more efficient and automated. It’s really about taking manual intervention out of the workflow because that represents the greatest operational risk.”
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