Posted on 26 March 2021
What to look for when selecting a service provider
In the ever-evolving alternative fund industry, selecting the right partner is essential to capturing opportunities. Regardless of whether you manage a small stand-alone fund with a limited number of investments or a large multi-billion fund with complex investments across multiple jurisdictions, finding a service provider that suits your needs will be critical to your success.
But how do you find this partner? You will want an established name with tested experience in the services you require. But what else? To support you in selecting the ideal partner, we have created a guide covering the essential elements they should bring to the table.
1. Knowledge via skilled teams
To succeed in the alternative landscape, you will require a partner with a deep, comprehensive understanding of the industry. One that is in tune with evolving regulations and emerging trends across private equity, real estate, private debt, and infrastructure to allow you the potential to grow wherever opportunities should arise.
The knowledge of your partner takes form through the personnel they employ, and as such, is a crucial aspect to be evaluated. These are the individuals that embody the provider’s expertise through their ability to apply their knowledge, communicate clearly, perform accurately and deliver consciousness to deadlines. Analyzing the employee retention rate is a key indicator in understanding how your partner’s employees will affect the service provided to you. Working with the same individuals over the course of many years streamlines and further tailors the service offering you receive, adding tremendous value to the relationship with your partner.
2. Experience through a creditable and proven track record
In the ever-evolving alternatives industry, you will require a partner that understands the current landscape and factors that shaped it to be the way it is. Having an experienced partner with a proven track record of success and a longstanding history of strong relationships with fund managers in various asset classes will provide you the reassurance you need when setting up complex and bespoke structures.
3. Secure and defined processes
In today’s digital world, the protection of your data and personal information is of the utmost importance. Given the rising threat of cyber criminality, and the damages it can cause, you will want a partner with a robust information security infrastructure and BCP (business continuity plans) in place. This will provide you and your investors with the confidence of knowing that your financial information, intellectual property, and employee details are securely held by your partner. With your data secure, reliable BCP procedures will provide you with the assurance that your daily operations will continue regardless of unplanned disruptions. Powerful security systems and comprehensive continuity plans will instill the trust you want in your partner.
4. Leading technology and infrastructure
In today’s modern industry, having the technology to provide organized and aggregated data for reporting and valuations is critical to attracting investors. The ideal partner leverages best-in-class technology, whether it be an off-the-shelf solution or developed internally to deliver new levels of innovation, capacity and quality to your needs. This ensures that your tech solutions are streamlined and synchronized to meet your objectives across the various alternative asset classes.
5. Services tailored to your needs
Generic services will limit the ability of your structures to reach their full potential in the complex alternatives industry. Finding a provider whose services span the entire value chain of alternative investment structures will ensure that you receive a customized service offering that meets your exact needs.
6. Vertical integration
Relying on various third-party providers to service complex multi-jurisdictional structures costs time and resources when it comes to coordinating tasks and synchronizing data. To avoid disruptions and streamline your operations, your partner should offer a fully integrated solution that enables it to service every entity in your structure across the entire value chain.
7. Global network
To capture opportunities wherever they may arise, you will need a partner that understands your world, wherever that may be. As investor demand, regulatory frameworks, and legal obligations differ depending on the jurisdiction, you will want a partner who not only has a presence in the world’s most strategic business jurisdictions, but a local presence wherever you wish to set-up structures or attract investors. Selecting a partner with a large international network of local partners will provide you the expertise and scale to identify and own global opportunities.
If you are able to satisfy these basic points when evaluating a provider, you may be on the verge of a lasting partnership. While this is not an exhaustive list of all you should evaluate, it should offer a solid foundation of discovery and knowledge concerning the service providers under your review.