Key Insights and Takeaways from Invest Europe's CFO Forum

24 Jun

Key Insights and Takeaways from Invest Europe's CFO Forum

In case you missed the latest edition of Invest Europe’s CFO Forum, Patrick McCullagh, Head of Sales EMEA at Alter Domus and moderator of the “Getting Ahead of the Latest Hurdles” roundtable happily shares four of his key takeaways.

 

EVOLVING FUND STRUCTURES

What’s happening:

  • Funds, LPs and investments are increasingly globalising across an even broader range of locations;
  • The scope of work for middle- and back-office teams continues to increase, driven by investor, regulator and manager demands.

The impact:

  • Increased globalisation has a profound impact on the range of regulatory and tax information with which managers must comply;
  • Obligation for CFOs and COOs to be able to react in an informed and agile way to meet the new information-heavy data and reporting demands;
  • Regulatory scrutiny on different types of LPs within their own industries is having a knock-on effect on the data that managers need to provide them with, which can impact the overall cost and complexity of their operations.

Key takeaway:

CFOs and COOs need their systems, service providers and in-house teams to facilitate the efficient and accurate production of these expanded regulatory and LP data and reporting sets.
 

CONTINUING EXPANSION OF CFO AND COO JOB SCOPE

What’s happening:

  • The importance of the CFO and COO role continues to be evermore critical with involvement in raising funds, investing, regulatory representation and portfolio reviews;
  • New types of LPs are entering the private equity and private debt markets often for the first time.

The impact:

  • Many types of LPs, within funds and managed accounts, require more in-depth reporting which they expect from the fund manager;
  • Back- and middle-office teams find their work scope has increased and has become more complex and demanding, requiring approaches such as additional resources, better use of software assets or a review of which skilled service providers are best able and experienced enough to handle these specific needs.

Key takeaway:

CFOs and COOs faced with these challenges are under pressure to provide solutions which are benefit-aligned to the manager and investors in terms of cost, value and reliable service sustainability.
 

INCENTIVISING TEAMS

What’s happening:

  • Given the critical importance of finance and operations teams to managers—and the demand for these skills within the market—back- and middle-office staff are increasingly in focus for incentivisation strategies which help to appropriately align firm wide focus and encourage staff stability and skill sustainability.

The impact:

  • CFO and COO involvement in structuring incentives for middle- and back-office staff takes on greater importance;
  • It is increasingly important to cater for younger/newer members of manager teams, enabling them to invest and be incentivised.

Key takeaway:

Aligning incentives across the management team (and also by outsource service providers for their own operations teams) is a positive way to ensure stability and the sustainability of expertise, skills and individuals in their roles.
 

DATA COLLECTION, ANALYSIS AND REPORTING

What’s happening:

  • The range of data being collected and the use of that data within the middle-and back-office has grown, presenting two challenges:
  • Aggregation of data sets within the “back-office” of middle-office;
  • Analysis and productive use of that data within the “front-office” of middle-office.
  • Increased need to consolidate and reconcile between offline and online data sets.

The impact:

  • Middle and back-offices are applying greater focus on different areas, including regulatory compliance, performance reporting and risk management;
  • Managers faced with increasing cost and staff overheads from their middle-office are keen to ease the cost and complexity of data collection, enabling them to put more focus on the actual analysis and outcome of that analysis.

Key takeaway:

The most successful managers and service providers will be those that are able to provide the greatest scope of integrated data, thus facilitating better, faster analysis, profitable outcomes for the manager, and best-in-class services for investors.


 

The continued increasing globalisation and evolution of fund structures have important and challenging impacts on the roles of CFOs, COOs and their teams. Those new challenges impact team structure, technology, outsourcing needs and skill sustainability.  The winning managers and service providers will be those able to deliver the broadest range of integrated solutions and data, supported by skilled, experienced and stable staff, ensuring their differentiation, efficiency and value within a competitive market.

 

Patrick McCullagh
Head of Sales, EMEA
+44 2076 454 821

 

 

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