Customization Key for Fund Service Providers in Private Equity Space03.05.2013
Within the alternative investment sector, private equity stands out for the level of customization required for fund administration.
“While there are common characteristics to private equity funds and private equity firms, each fund and firm is different and unique in some way,” said Andrew Hoemann, head of private equity services, Americas, at Citi. “Accordingly the level of services and client service model required of a fund administrator may vary by private equity firm for fund administration services.”
Citi was recently awarded a mandate from glendonTodd Capital to provide private equity fund services.
Based in Dallas, glendonTodd is a private equity firm that focuses on investments in healthcare real estate, data centers and related infrastructure, technology-enabled business services companies and financial services companies.
“We think Citi’s experience in meeting the specialized needs of private equity sponsors fits well with our investment philosophy,” said Mary Hatcher, chief financial officer and chief compliance officer at glendonTodd, in a statement. “The knowledge of their staff and the depth of their capabilities were key factors in our decision when finding a service provider for our private equity funds.”
Private equity firms are unique in the sense that the fund product is different than other traditional investment vehicles.
“It requires service professionals with specific knowledge about such technical matters as allocation, waterfall distribution models, entity structure and financial reporting,” said Hoemann at Citi. “Further each strategy—fund of funds, real estate, energy, buyout, etc.—has its own respective nuances.”
Citi OpenInvestor is an umbrella brand for investment services that Citi provides to institutional, alternative and wealth managers. This includes middle office investment administration outsourcing, fund administration services, custody, collateral management, securities lending and investing and financing.
“Our OpenInvestor-private equity services will provide glendonTodd with a robust solution and experienced team for its fund servicing needs, eliminating the need to build this capability internally and allowing the glendonTodd team to remain focused on its core business, investing and providing returns to their investors,” said Hoemann.
Separately, Citi has launched Network 3.0, it integrated custody platform with a suite of new investor service.
The ability for investors to meet performance objectives relies on maximizing the efficiency of investment operations, accessing critical decision-making information and implementing strategies effectively in markets that offer the most opportunity, the company said.
“Citi has a long history in shaping and accelerating change in securities markets around the world, said Neeraj Sahai, head of securities and fund services at Citi, in a statement. “Network 3.0 is a global transformation initiative aimed to redefine the way global investment support services are delivered in order to achieve best-in-class service and meet the challenges of an ever-evolving securities landscape.”
Key capabilities include Network Direct, a proprietary mobile platform through which clients can access detailed information on fund flows, local market practices, transactions and counterparty exposures and speak live with local Citi teams; and the Market Infrastructure Risk Heat Map, a visualization tool which gives institutional clients access to market infrastructure risk analysis for each market in Citi’s global network.
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