Posted on 05 October 2022

Chasing Waterfalls


Speaking with Private Funds CFO as part of their Automation, Systems & Technology Report, Dean Schaffer discusses why the private funds industry is beginning to embrace automated processes to calculate carry and waterfall systems.
The costs and challenges associated with integrating new operational systems coupled with a lingering preference for using Excel have long deterred private fund managers from adopting new technology to tackle waterfall calculations. This long-standing aversion towards technology and automated systems is slowly evaporating as service providers introduce a growing number of innovative technologies to support managers with their increasingly sophisticated and cumbersome waterfall calculations.

Dean underlines that the rapidly growing scale of capital and data in the private fund sector is forcing managers to leverage new technologies that can provide the granularity needed to perform increasingly complex waterfall calculations. He explains that these new technologies offer clear benefits over conventional Excel spreadsheets as they can evaluate data and identify errors more effectively.

The technology has a clear benefit over spreadsheets in being able to do calculations with a lot more granularity, efficiency [and] speed, and with an institutionalized format with strong checks and balances,” says Dean.

Learn more about how automated processes are transforming waterfall calculations by reading the full article here (subscription required).