Digitising the Investor Experience

Record-breaking fundraising numbers in 2019 highlighted investors’ increasing appetite for alternative investments. But while the sector has seen rapid growth, evolving regulatory and market pressures have created new challenges in terms of operating costs. As alternative asset managers rush to launch new products to meet soaring demand, challenges around cost optimisation have come into sharper focus. Maximilien Dambax, Group Product Head of Fund and Corporate Services, and Courtney Thomas, Head of Client Portals, examine the role technology can play.

Alter Domus’ recently published technology report shows that some fifty eight percent of alternative asset managers believe technology will help address the particular challenges they face. And transformative technologies— portals and communication platforms—are widely regarded as the most effective ways to address their growing concerns. From the report’s overall conclusion, it seems clear that digital technologies are set to transform the alternative investment universe for asset managers, investors and regulators alike.

Driving forces behind digital transformation

From data protection to asset administration at scale, strong data management systems are critical in supporting asset managers as they tackle today’s complex challenges. But asset managers alone are not driving the need for digital transformation—investors and regulators are also playing their part in re-shaping the alternatives landscape.

Asset managers seek a competitive edge

As investment strategies become increasingly sophisticated, institutional investors’ expectations for clarity and transparency at every level of their portfolio holdings - performance, ESG, fees – grow accordingly. As noted in our technology report, transparency and enhancing the investor experience are identified as key challenges currently facing fund managers. Many managers are seeking ways to deliver a more informed and proactive service to their investors through faster response rates and improved data access.

Increasing investor demands

Today’s asset management community manages investor relationships across a diverse spectrum of asset classes, fund vehicles, vintage years and jurisdictions. The result is a mix of complex and inefficient communication. Streamlining investor communications in a consistent, secure, and consolidated manner can go a very long way in enhancing the overall investor experience. Improved platforms can reduce time spent during the investor onboarding period. They can also increase investor portfolio transparency, ensure a secure communication channel from a cybersecurity standpoint and provide a truly customised experience.

Growing regulatory pressure
While Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations are designed to target criminal and terrorist activities, they also impact significantly on the investor onboarding experience and requirements. Enhanced due diligence prerequisites enforce the use of systematic and well-documented steps in establishing new client relationships.

These regulations, combined with the General Data Protection Regulation (GDPR) in Europe and the Foreign Account Tax Compliance Act (FATCA) in the United States, have increased regulatory pressures on managers and their investors. Digital transformation provides a solution for meeting these dynamic requirements.

Meeting the needs of asset managers, investors and regulators

Given the rapid pace of change in the alternatives sector, smart solutions must be developed for the challenges facing fund managers and their investors today. For example, Alter Domus’ Digital Subscription Fulfilment (“DSF”) application, part of the CorPro client portal, offers a secure, streamlined and simplified fulfilment process. It opens new doors to asset managers and investors with continuous access to a secure, customisable portal that includes a document library, a reporting database, dynamic dashboards and a digital operational workspace. The DSF application harnesses the real potential of transformative technologies to support asset managers in today’s dynamic environment.

Enhanced investor onboarding experience

By transforming how asset managers engage with their investors, the entire subscription process is digitised on a single platform—from the initial data room email invitation to fund manager execution of the subscription document.

Accessible data

Most data-related challenges facing managers and investors today are related to the quality of the data, not the quantity. Alter Domus’ DSF tool delivers properly formatted data in a timely manner and is easily accessible to all stakeholders.

Customisable reports

The portal creates presentation-ready dashboards while also providing the manager with granular information through a self-service reporting platform tool, allowing them to directly generate reporting results through the accounting-engine agnostic tool.

Real-time view into operational workflows

The DSF application provides a clear view into operational workflows to track progress between various workstreams and participants. A truly transformative model, the tool has bridged the gaps between asset managers, investors, and administrators. The collaborative digital onboarding platform works to connect all three stakeholders in real time.

According to Courtney Thomas, Head of Client Portals, “Digitisation in the alternative space has quickly become a reality with managers faced with a few simple options: Either step up to today’s demands, begin a never-ending game of catch-up by creating a piecemeal technology infrastructure, or risk obsolescence with the use of outdated tools.”

Benefits of a Digital Investor Experience

• Reduced risk of error with less manual data points
• Enhanced control and administration
• Increased transparency for investors and managers with distinct onboarding KPIs
• Scalability for large closes under tight deadlines

A new generation of portals with digital subscription features are poised to create an ecosystem where the needs of investors, managers and regulators alike are met. Not only do these types of portals provide well-organised, transparent data, they also provide an opportunity to streamline workflows and transform communication streams across the fund community as a whole.

Maximilien Dambax, Group Product Head of Fund and Corporate Services, reveals “There’s no doubt that transforming the investor and manager experience is a challenging undertaking, but the real danger lies in doing nothing.”

This article was originally published in Sensus Magazine. Download the latest issue below.