The relentless pursuit of efficiency, accuracy, and growth is a common thread that binds together asset management firms across the spectrum—including private equity, venture capital, and funds of funds. Yet, this pursuit is often hampered by challenges that are deeply entrenched within the industry’s operational frameworks. The need for digital transformation in asset management has never been more pressing.
At the heart of these challenges are legacy systems and processes that many asset management firms continue to rely on. These systems and spreadsheets, characterised by their heavily customised nature and dependence on manual interventions, are not just relics of a bygone era; they are active impediments to scalability and efficiency. The industry has seen how such dependencies can lead to significant inefficiencies, with reports highlighting that manual processes can increase the risk of errors by up to 50%. Moreover, the active involvement required by asset managers in generating reports and overseeing work not only duplicates efforts but also diverts valuable resources from core investment activities.
Adding to these operational woes is the complex and often opaque pricing models adopted by many traditional administrators. Charges based on committed capital or NAV, coupled with variable, people-based fees, create a financial burden that is both unpredictable and disproportionately high. With fees under pressure and every basis point impacting returns, the need for a more transparent and value-aligned pricing model is undeniable.
Emerging asset managers are particularly vulnerable to the high and unpredictable administration costs that often accompany the early stages of growth. The struggle to understand the intricate web of fund structures and operations, alongside the daunting task of accessing and managing a slew of relevant service providers, poses a considerable challenge. Moreover, the personal touch needed in onboarding Limited Partners (LP) becomes an intricate dance of balancing relationships with professional rigour.
Established asset managers are not exempt from hurdles. They frequently battle the complexities of overseeing operations across diverse fund structures and jurisdictions. Coordinating large operations teams with multiple service providers can lead to inefficiencies, and the management of sophisticated investors with exacting mandates, side letters, and waterfalls becomes a nuanced art. All the while, they contend with a tech stack that is often fragmented and unreconciled, diverting attention from their core business—raising and investing capital.
At the pinnacle of the industry, enterprise asset managers confront the colossal tasks of data migrations, compliance with stringent vendor requirements, and the coordination of expansive operations teams across varying authorities. They face the relentless pressure of high operational costs that can diminish the carry and profitability that are paramount to their existence.
At each of these levels, there’s a clear and present need for a transformative solution that not only alleviates these pain points but ushers in a new era of operational excellence. Amidst the digital solutions that have emerged, fundcraft’s offering stands out for its comprehensive approach to solving the pain points faced by asset managers. What sets fundcraft apart even further is its all-encompassing offering, which includes not only the cutting-edge digital platform technology but also 3rd Party AIFM (Alternative Investment Fund Managers) and Central Administration services. This holistic approach ensures that asset managers are not just receiving a tool but a full-fledged partner in their operational workflow. This is a significant departure from the piecemeal solutions offered by many in the industry, where the technology may serve as a stopgap rather than a strategic enabler.
fundcraft’s innovative pricing model also deserves a special mention. Moving away from the industry norm of having a mix of variable fees and basis points on committed capital, it offers an all-in fee based on deployed capital, giving a predictable, value-based pricing alternative. This approach not only ensures transparency but also aligns the cost directly with the value delivered, enabling asset managers to plan and forecast with greater accuracy.
Comprehensive operational and onboarding support, underpinned by a streamlined, digital introduction to an ecosystem, ensures all operational parties are orchestrated with precision. For the emerging and established managers, fundcraft presents a global oversight system capable of managing operations in all jurisdictions from a singular platform, coupled with the flexibility to automate and configure reports tailored to the intricate details of fund operations. The API-enabled operating system, complete with a consolidated database, eliminates the legacy tech dilemma of constant data reconciliations and fragmented processes, enabling managers to focus on their primary directive: raising and investing capital.
At the enterprise level, fundcraft’s robust digital infrastructure, offering both software and services, supports complex data migrations and the digital onboarding journey, satisfying strict vendor requirements with ease. It affords a flexible operating system, adaptable to the diverse needs of extensive operations teams, ultimately leading to a significant reduction in the administrative headcount.
The asset management industry stands at a pivotal crossroads, with digital transformation being the key to unlocking future growth and efficiency. fundcraft’s unique blend of digital platform technology and comprehensive fund administration services position it as a frontrunner in this transformative journey. By addressing the critical pain points through a holistic solution, fundcraft not only promises a more efficient and transparent operational landscape but also redefines what asset managers can expect from their administrative partners.