Select a Fund Administrator Who Can Support the Private Equity Ecosystem
The private equity industry is complex and constantly evolving — with a wide array of interested parties. To succeed, private equity firms need a trusted advisor who can provide comprehensive services throughout the many levels of this ecosystem.
What is the private equity ecosystem?
The private equity ecosystem is a complex network of stakeholders who work together to create value and generate returns for investors. It includes:
- Fund managers and firm sponsors — Private equity fund managers and sponsors are responsible for raising capital from investors, investing that capital in portfolio companies, and managing those investments to generate returns.
- Portfolio companies — Private equity portfolio companies are the companies and assets in which fund managers invest.
- Investors — Limited partner investors provide the capital fund managers use to invest in portfolio companies.
Why is it important to select a fund administrator who can support the private equity ecosystem?
Selecting a fund administrator who can support the entire private equity ecosystem is essential for several reasons:
Industry experience
Private equity firms need an advisor who understands the distinct challenges and opportunities of the industry and can provide valuable insights and guidance.
A fund administrator who has experience working with fund managers, investors, and portfolio companies can leverage their experience to add value to the private equity firm through the services they provide.
Efficiency
Working with an advisor who can provide a wide range of services can help firms streamline their operations and reduce costs. Rather than managing multiple providers, private equity firms can rely on one trusted team to handle their needs at all levels of the ecosystem.
Flexibility
Private equity firms and their portfolio companies have specific needs and challenges. A professional services firm that can provide a range of services can tailor its offerings to meet the individual needs of each client, providing a more customized and effective strategy.
Compliance
The ever-evolving compliance landscape between reporting requirements, anti-money laundering enhancements, and exemption regulations can be cumbersome and confusing to navigate. Private equity firms need an advisor who is up to date on the expanding compliance environment.
In addition to fund administration, what does supporting the entire private equity ecosystem look like?
Providing support to the private equity ecosystem means offering a range of professional services to support private equity firms, their portfolio companies, and investors. For example, CLA can:
- Help with fund formation and structuring
- Perform tax consulting and compliance services for the fund manager, fund, general partner, and portfolio companies
- Provide deal services on portfolio companies, including due diligence services and quality of earnings reports
- Perform outsourced accounting for management and portfolio companies
- Provide investment valuation services and/or business valuation services for portfolio companies
- Provide transaction advisory services for mergers and acquisitions
- Help with searching for key hires of fund managers or portfolio companies
- Provide IT strategy consulting, data analytics and insights, and cybersecurity
- Perform financial statement audits and reviews of portfolio companies
- Provide owner transition advisory services to legacy owners of portfolio companies
- Offer private client services for investors, providing a comprehensive tax and wealth planning approach
How we can help
Selecting a fund administrator who can support the entire private equity ecosystem is essential for success in this complex and constantly evolving industry. At CLA, we understand the importance of this relationship and offer a wide range of fund administration and other professional services.
Contact us today to learn more about how we can help you achieve your business goals.
Written by Jolene Bulger
Craig Arends is a principal at CLA and is the managing principal of CLA's private equity practice. Craig brings a concentration of experience in providing accounting and transaction structuring advice for leveraged recapitalizations, purchase accounting and SEC reporting, assessing quality of earnings, and GAAP accounting. He has far-reaching experience with critiquing financial models and reviewing target companies' financial performance to identify cost reductions and/or operating efficiencies Craig has more than 30 years of experience in public accounting serving public companies, private equity groups, and companies, including a term as principal in charge of a Big Four Capital Markets Group in Moscow, Russia. He has led financial accounting due diligence projects for private equity investor groups and venture capital funds, primarily in the technology, communications, and manufacturing industries, as well as assisting with Foreign Corrupt Practice Act matters ranging from investigation of payments made, validation of compliance with corporate policies, and review of proposed transactions to ensure compliance. When not working, Craig enjoys watching any sports, but his most favorite are baseball, football and soccer.
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