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Why Technology is Reshaping the Private Equity Industry and How NES Financial Can Help

NES Financial’s Senior Vice President of Fund Administration Michael Richards led a roundtable discussion at the ALTSSEA conference called “Fund Administration: How Technology is Reshaping the Industry” on Sept. 17. ALTSEEA is a one-day conference in Seattle featured leading practitioners from the fields of private equity, venture capital, real estate, hedge funds, cryptocurrency, artificial intelligence and alternative investment markets. Richards hosted a roundtable, and the conversation centered around the numerous ways in which technology is reshaping the Private Equity Industry.

Succeeding in a Demanding PE Environment

Fund managers face multiple pressures, including raising and retaining capital, finding appropriate investment opportunities, and generating returns that exceed investor expectations. To succeed, they need to keep abreast with the swift currents roiling the industry — including investor demands for greater transparency and ever-growing reporting complexity — without disrupting their primary objective of managing the investment portfolio. In the world of private equity management, changes happen fast, and solutions need to keep pace. That’s where technology comes into play.

However, according to an annual survey of private equity CFOs, accounting firm Ernst & Young concluded that many private equity firms have been slow to invest in technology infrastructure, especially when compared to banks and diversified asset managers. It’s not out of disinterest. Most private equity CFOs understand that automated investor reporting is the way of the future, but satisfying investor requests for financial data is one of the most difficult areas in which fund managers struggle to manage costs, and some fear that automation will sacrifice flexibility, thus decreasing investor satisfaction.

NES Offering Cutting Edge Private Equity Technology Solutions

That hasn’t been our experience at NES Financial, where we’ve developed an agile, technology-focused approach to private equity management. Our Investor Portal (built into our proprietary technology platform) offers investors 24/7 access to fund status, capital account financial data, document sharing and personal alerts, thereby decreasing the number of customized reporting requests that fund managers receive. The Investor Portal allows custodians and investment managers to track performance and analytics in real time, and it alleviates other industry pain points, including compliance and data security.

Our technology-focused approach to private equity resonates with our clients, who see value in being able to simultaneously manage multiple databases and feeds, calculate valuations, make data-driven decisions, and employ augmented and artificial intelligence applications, but who would rather not develop those technical competencies in house. Ultimately, what all fund managers need is the confidence and flexibility to run their businesses the way they see fit, and the blend of technology and client service NES offers as a third-party fund administrator provides them with the strong foundation they need to maximize their strategic advantage at an especially complex time in private equity management.

While no fund administrator has come up with a single, technological silver-bullet solution that would remedy all of the private equity industry’s pain points, NES Financial continues to focus on continual improvement to find innovative solutions to bring to market.

“NES has proven that it is able to use technology and industry expertise to assist our clients and help solve some of the challenges they face,” said Richards. “I’m looking forward to our roundtable at ALTSEEA as a way to talk about our innovative, next-generation solutions alongside private equity leaders and technologists who bring their own thoughts and ideas to the table.”

Want to participate in NES Financial’s Michael Richards’ roundtable, “Fund Administration: How Technology is Reshaping the Industry,” in Seattle on September 17th? It’s not too late to register for ALTSSEA!

 MICHAEL RICHARDS

Senior Vice President, Fund Accounting

Michael has brought an impressive investment skillset to NES Financial after nearly 18 years at State Street, where he built his reputation in hedge fund and private equity fund administration within their Alternative Investment Solutions division. There Michael was responsible for a large global team servicing top institutional fund sponsors and LP customers with a broad spectrum of alternative investment product types. His background in alternative fund administration and financial reporting with leading private equity fund sponsors has enhanced NES Financial’s approach to complex accounting transactions, automation, and financial and investor reporting, and is bolstering its rapidly expanding presence in the private equity fund administration space.