A Definitive Guide to Co-Sourcing

When outsourcing, private capital firms often find themselves in one of two camps: they are either grappling with growing pains as their assets under management increase or they are seeking a new fund administrator who is more aligned with the needs of today’s sophisticated LPs. 

In both cases, the most insightful GPs and fund managers are discovering that co-sourcing delivers best practices in private capital today.

A version of outsourcing that takes a cloud-driven, software-centered approach, co-sourcing is perfect for self-administering firms that want to scale up or change service providers with the least amount of disruption.

This Definitive Guide to Co-Sourcing explains why co-sourcing is the innovation that is sweeping through fund administration for private capital today.

A Definitive Guide to Co-Sourcing

Limited partners today are more sophisticated than ever. They expect better information, better services, and better access to data in real time. Regulators are also imposing new rules on investment managers to increase transparency, protect data and privacy, and establish guardrails for third-party service providers. These changes, meanwhile, are coming amid a shortage of accountants and other staff that is hitting the financial sector hard. As a result, fund managers are under enormous pressure. A new approach to fund administration, however, is helping fund managers address these trends: co-sourcing.

TABLE OF CONTENTS
 

What is co-sourcing?

In-house fund administration gives private capital firms control over their middle and back offices. But there’s a tradeoff. In-house demands investment in people, technology, and office space. It’s inflexible, especially given staffing challenges these days. So, firms outsource. Outsourcing lets them access different capabilities, scale as they need, and control costs. But in typical outsourcing arrangements, a third party controls their data. In a time of rising compliance burdens and fierce competition for LPs, this arrangement presents its own risks. Now co-sourcing has arisen as the best of both worlds. Firms have total control over their data as well as flexible capabilities that scale.

Co-sourcing defined

When a private capital firm outsources services to a conventional fund administrator, the administrator stores and controls the firm’s data in the administrator’s proprietary enterprise software.

In co-sourcing, in contrast, the GP holds the license to the enterprise software — and retains control of their data — while the service provider simply works within the firm’s software to perform their services.

A private capital firm that co-sources, for example, would grant a fund administrator access to their tech stack and data for back-office functions. The fund administrator can even work with the GP and software provider to help set up the firm’s system according to the GP’s unique needs.

Ultimately, co-sourcing helps address the biggest challenge facing fund managers today: data management. It streamlines the data path between service providers, auditors, lawyers, compliance teams, and other internal and external stakeholders.

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What market conditions are driving the need for co-sourcing?

Fund administration has never been more complex. Co-sourcing offers a dynamic solution to an array of challenges facing private equity in the years ahead, from evolving investor expectations to market disruptions and new regulations.

Co-sourcing keeps asset managers closer to the data driving their decisions, which is part of the push behind the SEC’s new proposed rules for investment advisors.

It allows firms to reap many of the benefits of outsourcing – avoiding the cost of an in-house accounting team and other back-office functions – without assuming the many related risks.

While it can be costlier than outsourcing, because firms own their software licenses and incur other expenses that a vendor would otherwise incur, the model has become an appealing proposition in an industry where 60 percent of asset managers are considering outsourcing, according to a WBR Insights and Northern Trust white paper. Market conditions creating this shift include unstable markets and constant disruption; increasingly complex funds; new SEC regulations impacting private equity and private fund advisers; rising expectations from investors; an accountant shortage that shows no signs of letting up; and the rise of new cloud-based technologies for finance.

Unstable markets, constant disruption

The US bank collapses of 2023 highlighted the consequences of poor risk management and failure to adapt to market conditions.

There’s no shortage of threats facing investors: rising interest rates and inflation; technological disruptions; labor shifts and shortages, remote work, re-shoring, and global tensions. Asset managers face the daunting job of mitigating these risks and properly valuing companies and products despite this turbulent context.

Unlike traditional outsourcing, co-sourcing helps GPs fetch the right data more quickly than outsourcing, provides a valuable external check on functions like valuations and reporting, and allows firms to leverage their existing systems and stay on the cutting edge of administration while directing more resources to their core competencies.

Increasingly complex funds

Once upon a time, private equity firms offered a few products to a handful of high-value clients. Today, asset managers offer a wide range of products and asset classes, using various legal entities operating across multiple jurisdictions.

A few years ago, McKinsey surveyed two dozen GPs and found that many firms are operating a dozen or more entities, each adding new layers of complexity to compliance and reporting. New trends like ESG and impact investing are fueling that complexity, too, as funds must provide evidence of achieving all of their investors’ goals.

Regulations, furthermore, are constantly shifting, with the US, European Union, and Asian countries adopting different approaches to emerging challenges like artificial intelligence and data privacy.

Diligent fund administrators have compliance teams constantly tracking these regulatory changes around the world in real time, meaning GPs can sleep easy knowing their co-sourcing partner will adjust their operations accordingly.

New SEC regs

The SEC has proposed regulations that would impose two new requirements on investment advisers who outsource. First, they would need to conduct due diligence before outsourcing certain services and functions. Second, they would need to monitor their service providers on an ongoing basis.

If enacted, the new regulations will require fund managers to maintain robust, ongoing diligence reviews and partnerships with service providers who offer future risk-adjusted solutions – like co-sourcing.

The SEC proposed the new rules because of the explosion of outsourcing in fund management. To protect investors’ privacy, regulators want to keep general partners engaged as they increasingly offload more responsibilities to fund administrators and other service providers.

Greater compliance burdens

The SEC has also adopted new transparency requirements for large hedge funds and private equity advisors. The new rules lay out “triggering events” that PE firms must report within 60 days of the end of the quarter. They must also report on GP and LP clawbacks annually.

It’s just the latest example of how the compliance burden is growing for fund managers. Other jurisdictions, incidentally, are making adjustments, too. Fund administrators are laser-focused on tracking these changes and adjusting operations accordingly.

Co-sourcing allows firms to integrate that expertise without building it from scratch. And it allows firms to retain possession of their data, which is the first step to meeting compliance obligations, reporting deadlines, and conducting ongoing due diligence on vendors.

Demanding investors who expect more from GPs

Bain’s 2023 Global Private Equity Report highlighted a key development: Private equity is beginning to target wealthy individual investors. The reason is clear. These investors represent about half of all global AUM, but alternative investment funds oversee only 16 percent of that amount.

For private asset managers, this move to individual investors will require new technology solutions to create the efficiencies and speed on seamless platforms these investors have come to expect, while also mitigating risk.

Firms are already seeing an increase in ad hoc reporting requests from LPs – a trend that is going to continue. Both individual and institutional investors are increasingly insisting on speed and transparency from asset managers. Co-sourcing gives firms the streamlined data operations that best satisfy those demands.

The accountant shortage

This decade has brought nothing but bad news for CFOs looking to staff their accounting departments. More than 300,000 U.S. accountants and auditors left their jobs in 2020-2022, reported Wall Street Journal. Moreover, fewer college students are stepping up to fill the gap.

Many accounting firms are bumping up entry-level pay to alleviate the situation. At the same time, many asset managers are realizing that scaling up as efficiently as experienced fund administrators is harder than they realized.

Co-sourcing can offer private equity, venture capital, and other financial firms the security and flexibility they need during this shortage of accountants. It can also help CFOs deploy technology like automation and machine learning to more intelligently make up for the gap.

Cloud transparency and collaboration

The cloud is an essential component of co-sourcing. It enables both sides of the relationship to access real-time information and collaborate seamlessly — wherever they happen to work – while the firm’s data remains accessible in one central and secure place for partners and auditors.

Automated, cloud-based technologies can also give CFOs a bird’s eye view of operations with much less friction than only a few years ago. These technologies can deliver subscription agreements to investors, conduct AML and KYC due diligence, or move documents to and from partners for electronic signatures. Also, the most advanced platforms allow AI to learn and develop insights to make the process more efficient.

Is there an ideal GP or client profile for co-sourcing?

GPs at a private equity firm that recently opted for co-sourcing are representative. After growing to $1.2 billion AUM in late 2022, the firm began struggling to cover their tax and finance functions as investor requests, new regulations, and other developments pushed them beyond their core competencies and stretched thin their already stressed resources. 

The firm’s CFO identified four problems to solve: 

  • The firm wasn’t leveraging the value of their data 
  • The CFO needed to unlock that value 
  • Their fund administrator should help provide these modern, data-powered operations


The firm opted for co-sourcing because it delivered: 

  • Modern, data-powered operations 
  • Ownership and retention of their data and its value 
  • Superior assistance with administrative processes and other daily business


“We didn’t want to go back and forth in a traditional outsourcing relationship with such an important part of our team,” said the firm’s CFO. “Co-sourcing extends our capabilities and gives us greater control, allowing us to be more nimble.”

A representative case study

A private equity firm was facing a dilemma. The firm’s founding partners had a strong sense of ownership over the firm’s processes. Now that they had more than $1 billion AUM, however, the CFO was concerned about three challenges: 

  • Human errors in spreadsheets 
  • Antiquated or inadequate data control and analytics 
  • Compliance and security challenges. 

 
Turning to outsourcing, the firm hired a fund administrator. The new service provider had the industry expertise. But they were slow to respond to information requests and depended on increasingly outdated manual processes. 

The CFO identified the criteria for the firm’s next fund administrator: 

  • They would use tech-driven solutions 
  • The firm would retain absolute control over their data 
  • They would use collaborative virtual tools 
  • No compromises on the quality or security of service 

 
The firm tried something new: co-sourcing. The results were stellar. Co-sourcing freed the CFO to hire the most innovative fund administrator who had: 

  • Deep industry expertise 
  • Established automated processes to expedite cooperation 
  • Sufficient preexisting knowledge of the firm’s software capabilities to suggest improvements 


Lastly, the firm turned to co-sourcing shortly before the SEC proposed rules requiring that firms track their service providers more closely. Co-sourcing was ideally suited to complying. In retrospect, the CFO’s decision to hire the co-sourcing fund administrator looked farsighted. 

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Why is co-sourcing an advantage?

The combination of increasingly complex funds and growing regulatory scrutiny adds up to serious headaches for CFOs and their compliance teams – unless they have the digital tools and data operations to cope with this new reality.

Firms that co-source with tech-forward administrators will be on the leading edge as new technologies become available. Yet they still control their data — reducing the risks associated with data migrations to and from vendors and ensuring that GPs know their data is adequately protected.

The advantage is a combination that cannot be found in-house or outsourcing: agility, flexibility, and peace of mind.

You own your data

Outsourcing lets fund managers focus on portfolio management and building client relationships, but risk losing easy access to back-office data. More problematically, it can mean that fund managers end up with an external and internal set of books.

That’s where co-sourcing comes in. Co-sourcing provides fund managers with a centralized platform powered by the best added technology, best practices, and staff from third-party administrators — rather than piecing together a patchwork of outsourced solutions.

And by keeping control of this data, co-sourcing allows firms to better manage the various data channels between internal and external stakeholders, from auditors to lawyers, compliance teams, investors, and service providers.

Gain maximum flexibility with service providers 

Fund managers can’t afford to add processes that don’t add immediate value. But they also can’t afford to settle for tech stacks or service providers that aren’t competitive. A forward-thinking co-sourcing partner can ensure that spending on operations has the desired return on efficiency and accuracy. 


With a specific focus on mid- and back-office functions, professional service providers know the market and can select catered software solutions with maximum impact on the bottom line. That means faster due diligence, speedier recruiting, more accurate reporting, streamlined data operations — and ultimately creating a world-class team of service providers regardless of a fund manager’s size.

Gain maximum scalability with clients 

Apart from costs, perhaps the most important factor driving the move toward outsourcing is scalability. COVID has accelerated existing trends — recruiting challenges, high turnover, and technology restraints — convincing many fund managers that strategic expansion requires an external partner. Co-sourcing marries scalability with more in-house control.

Co-sourcing not only removes these technology and manpower restraints from back-office expansion, it adds efficiency to the investment side, too, by advising firms on the smart deployment of emerging technology throughout their operations. That means firms get more from the people they have, with the targeted integration of automation, machine learning, and even artificial intelligence.

Control costs

The up-front cost of co-sourcing falls somewhere between in-house operations and outsourcing, largely due to the cost of licensing. But it presents tremendous potential for ongoing cost control, thanks to a more strategic approach to data operations and the efficiencies delivered by dynamic technology solutions.
Smart selection of software and service providers also means that fund managers are operating on cloud-based platforms that stay current without costly upgrades — once firms make the investment to shift from legacy systems.

And the benefits to the bottom line make up the difference — with streamlined data operations that boost GP performance and LP satisfaction.

Boost efficiency

Co-sourcing fund administrators are among the most tech-savvy in the industry. They unlock value in enterprise software that investment managers might ignore or overlook, automating tasks in workflows, streamlining processes, and reducing the errors associated with manual operations. The benefits of these efficiencies accrue over time, helping firms overcome operational challenges like staff shortages.

Identifying inefficiencies isn’t easy. In a co-sourcing model, fund administrators can help firms pinpoint bottlenecks and redundancies, deploy innovative technology solutions to fix them, and formulate key performance indicators that will help reduce friction and accelerate operations.

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Compliance

Retaining possession of one’s data is the first step to meeting compliance obligations, reporting deadlines, and conducting ongoing due diligence on vendors, as proposed SEC rules would require. Holding one’s data also reduces the risks associated with data migrations to and from vendors and ensures that investment managers know their data is adequately protected.

Meet service organization controls standards easily

Meeting SOC standards is a lot easier when data is not moving back and forth between service providers in a standard outsourcing model. Co-sourcing bridges the trust gap between fund managers and third parties when it comes to sharing critical data.

SOC reporting — and the accompanying audits — can be an unwelcome burden on operations, but it’s a crucial tool for building trust and transparency among internal and external stakeholders. Centralizing your services with a co-sourcing fund administrator creates an easier SOC process with a partner who can take on the work.

Be ready for the new SEC rules

New SEC proposals would impose two new requirements on investment advisers. First, they would need to conduct due diligence before outsourcing certain services and functions. Second, they would need to monitor their service providers on an ongoing basis.

If enacted, the new regulations will require fund managers to maintain robust, ongoing diligence reviews and partnerships with service providers who offer future risk-adjusted solutions, such as co-sourcing.

The proposed SEC rules create a new dimension of risk, which service providers must address if they want to be competitive. By offering co-sourcing, the GP owns the software license, as opposed to the fund administrator, reducing risk exposure in line with the SEC’s proposed regulations.

Make reporting easier

Co-sourcing allows a fund administrator to execute a fund manager’s accounting and reporting workflows right from the fund manager’s back-office system.

Yuriy Shterk, chief product officer at Allvue Systems, argues that co-sourcing is likely to phase out redundant practices like “shadow accounting,” in which a firm outsources its back-office work but keeps an internal set of books for compliance or as a backup.

Think of it as “insourcing” the expertise — powered by innovative technology — to manage reporting workflows with optimal efficiency, while doing away with the duplicative work of shadow accounting.

Make auditing easier

The wisdom of co-sourcing the tax department is not lost on the wider financial ecosystem. The 2022 EY Tax and Finance Operations Survey found that “94% of private companies are more likely than not to co-source tax and finance activities over the next 24 months.”

That’s because the cost of expert practitioners is often too high, yet the cost of major mistakes makes those people critical to success. And professional service providers can bring that expertise to bear, ensuring compliance without requiring a robust internal tax team.

Optimize operations

Co-sourcing can deploy the full power of technology on a fund manager’s operations, helping CFOs gain faster and easier access to analyses, rationales, and insights that drive efficiency.

Automated, cloud-based technologies can deliver subscription agreements to investors, conduct AML and KYC due diligence, and move completed documents between stakeholders for secure electronic signatures.

They also keep everything in a database for auditing and allow artificial intelligence to learn and develop insights to make the process more efficient.

Collect underlying investment data

LPs today want fund managers to leverage tools that can extract and integrate their data — including that of portfolio companies — into larger plans, utilizing it for better insights and more growth.

Most GPs are aware of this growing expectation, but that doesn’t mean they know how to deliver on it. Co-sourcing ensures that a single source of data is being properly protected, and used to improve the speed and quality of decision-making.

Automate subdocs and other tasks

Automated structures work especially well for the many functions that occur repeatedly in financial services, like sub docs, capital calls, SOC reports, and similar tasks.

Using automation to facilitate these functions and compile data related to them makes collaboration instantaneous and affords the flexibility to adjust according to new regulations.

Digital tools automate the entire approval process: streamlining a 60-page subdoc into a series of easy-to-follow input screens, exchanging documents with lawyers, handling the back and forth of editing, and resending in a streamlined resubmission process when mistakes are found.

Leverage machine learning

Using machine learning, automation allows platforms to identify inaccurate variables, biases, and similar discrepancies far faster than a human.

Because data is standardized and an automated system is continually curating the data, the system generates insights based on patterns it recognizes and the exceptions to those patterns.

Talent with deep domain expertise — never forget that people are an organization’s most powerful assets — can use these functionalities to test new strategies and provide better services.

Achieve closer collaboration

Co-sourcing fosters unprecedented communication and collaboration between fund managers and service providers. It allows a service provider to move beyond identifying problems to focusing on how those problems can be solved and turned into a competitive advantage.

Co-sources essentially become strategic partners inside a fund, helping the back office prepare for upcoming challenges or expansion. And because they are working within your system and organization, there is a natural alignment of processes and culture.

Maintain security

Co-sourcing requires a leap of trust when compared with keeping your operations entirely in-house. But it’s a significantly more secure arrangement than outsourcing.

All accounting and investor reporting work is carried out by one fund administrator, rather than a patchwork of service providers, each with their own potential vulnerabilities. With full control of their data, fund managers also have full visibility into who is accessing it and how it’s being used.

Furthermore, because they understand technology, co-sourcing fund administrators can also provide expert advice on securing systems when cyber threats emerge.

Embrace transparency, reduce risk, and achieve peace of mind

In many ways, co-sourcing forces fund managers to embrace transparency — first through their relationship with a fund administrator and then with other stakeholders. Rather than data being siloed or spread across various service providers, co-sourcing creates a single source of data accessible through powerful digital platforms.

And co-sourcing gives many fund managers 24/7 access to a team of operations experts that they simply couldn’t afford in-house, helping to slash mistakes and mitigate risk. That level of transparency and peace of mind becomes a differentiator for LPs shopping in a crowded PE landscape.

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A co-sourcing buyer’s guide

If you’ve made it this far, you understand the power and promise of a dynamic co-sourcing partnership. But how can fund managers actually set the wheels in motion, and how long does it take from decision to implementation?

This section aims to provide a buyer’s guide for GPs who might want to make the leap.

Is all co-sourcing the same?

However a co-sourcing arrangement is structured, fund managers need someone to look at their systems and help figure out what makes the most sense for them.

Back offices are customized. A co-sourcing relationship starts with a joint effort to break it down and say, “These are all the systems we’re using. These are the systems that we want to keep. If we implement co-sourcing, here’s how we are going to make all these things play nicely together.”

It’s a difficult decision but it’s very rewarding to get it right because if all these things work smoothly, it massively increases your efficiency.

How do you find a suitable co-sourcing fund administrator?

Look for fund administrators who have done it before — made up of people who have a playbook for how to do it and how to do it successfully. These people should combine a deep knowledge of the technology, with the ability to analyze your back-office requirements and see how you’re operating.

Then they should show the willingness to dedicate the proper manpower to get the job done. Because once the system is set up correctly, there’s a lot of work left to do to make sure that everything is working properly before the next deadline.

Questions to ask a potential partner

A potential co-sourcing partner should have a wealth of experience to draw on, with an ability to identify inefficiencies and discuss available solutions. They should have no problem answering these questions:


  • How will you help get the most out of our software and systems?
  • What off-the-shelf solutions can be deployed to address our specific inefficiencies?
  • What are some specific examples of how you have successfully deployed these solutions in the past?
  • Whom will you be working with, what are their qualifications, and how much time will they commit to the partnership?
  • How will this partnership help drive future expansion?

Who handles the transition to a co-sourcing model of fund administration?

There are often several parties involved, including a consultant, a software vendor, the fund administrator, and the GP itself. Anyone who’s going to participate should be involved in the transition in some way.

Often the consultant will map out the basics with the GP. And then the software vendor and the fund admin are looped in to finalize the details. In the end, all three parties should be involved to ensure it all goes smoothly.

How do GPs and software vendors handle the data migration?

Software vendors are ideally placed to handle data migration, but their main business is building the platform and maintaining it. They usually don’t want to dedicate much time to a big custom implementation, which is what a lot of PE shops need.

In these cases, the GP or the software vendor will often bring in an implementation partner that can help with that transition. These consultants are familiar with the platform, can work through an implementation plan, and help you get the data, but maybe not reconcile it. That typically falls on the GP.

Generally, a software vendor can endorse an implementation consultant or a partner.

What does implementation look like in the real world?

There are a few common scenarios for co-sourcing success.

One frequent scenario is when the GPs purchase the software platform but, due to the workload of their staff and their lack of knowledge, haven’t been able to implement all of its efficiency features. A fund administrator can come in and help design a setup that’s more efficient and takes advantage of all the system’s features.

Another scenario is when the GPs bring in a fund administrator along with the implementation consultant/partner. The fund admin can say, “Look, you know, that’s a great setup. But really, on a day-to-day basis, we can help come up with a better plan.”

What is the typical timeline?

To do an implementation properly, it takes three to six months. First, the analysis and design phase takes one month. Then the rest of the implementation can be done over the course of the quarter unless it involves high-end technology integrations.

The reality is, fund managers usually aren’t in that much of a hurry. Usually, the decision phase takes three to six months. The world doesn’t stop turning. A lot of other stuff is going on at the same time. It takes a little while to get everything mapped out and make the decision.

What factors influence the timeline?

The timeline is largely determined by how fast the fund manager wants to move, and how much manpower is committed by both the GP and implementing partners.

If the GP is in a hurry and cuts out the “decision phase,” it can be done in a quarter with sufficient resources. However, that can be slowed down by technology integration that requires niche expertise and careful coordination. If it’s a question of optimizing technology that’s already being used, the timeline can be on the shorter end.

Leverage the expertise of co-sourcing partners

Technology is often at the center of a co-sourcing relationship, but it’s the human connection that can truly maximize value on both sides. That’s especially true if CFOs find a co-sourcing partner led by like-minded principles.
That means advising on specific pain points like hand-filled subscription documents, wet signatures, compliance, data management, and other burdensome tasks.

And it means the CFO can leverage expertise from a range of people they were previously cut off from, including fund accountants, investor-facing relationship managers, and others.

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Co-sourcing best practices

Co-sourcing arrangements are going to look different for every fund manager, but centralized data platforms and automation are crucial components. While technology ambitions will vary between firms, some functions are calling out for automation, such as subdocs, virtual data rooms, and AML and KYC due diligence. 


But it’s the harmonious flow of data that is the holy grail of co-sourcing, and what really sets it apart from outsourcing. A successful co-sourcing relationship can collect and validate data from multiple sources, present it to stakeholders in a usable format — and ultimately optimize efficiency in the back office and drive better front-office outcomes.

The core principles of co-sourcing

Collaboration between people is the foundation of co-sourcing, allowing both sides of the relationship to focus on their core strengths and reach their potential.

The lifeblood of this relationship is a single source of data, in which all transactions, investments, reports, and audits are feeding into a growing body of potential knowledge and insight.

And technology is deployed to create synergy between highly skilled people and data assets, optimizing efficiency and creating a competitive edge.

Why are some firms reluctant to outsource?

Around 50 percent of asset managers outsource, found WBR Insights and Northern Trust. Managers have been reluctant to give up control of their data, their systems, and their ability to integrate systems. Outsourcing is a big commitment, between data migration and relying on another firm’s software. And for that reason, it’s not easy to change vendors.

Even though firms can put safeguards in place, outsourcing also increases the risk of a security breach or data loss because you are sharing financial records and other sensitive information with an outside partner.

Align goals and expectations

The first step to aligning expectations across your organization is setting clear goals to arrive there. It is therefore crucial for funds to identify and measure inefficiencies and opportunities for tech solutions, with KPIs serving as the criteria and test for those solutions.

That means collecting and dissecting a lot of data – understanding the myriad factors that affect portfolios, how their employees spend their time, which tasks can be automated, and how tech can help humans work faster or more effectively.

Configure your solution

Co-sourcing allows fund administrators — along with software vendors and consultants — to help fund managers create a bespoke solution that optimizes their operations. By working within the fund manager’s software, the service provider can help get the full potential from technology — and draw on their organizational experience to recommend tools or solutions to target particular pain points. This process starts with the configuration a solution and ends when it is fully customized to a firm’s needs.

Ultimately, it’s all about how you deploy data to its maximum effect, and the options are limitless when fund managers have full control of their data.

Let’s climb higher together

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Conclusion

CFOs today are rowing against two unstoppable currents: the rising complexity of fund management and growing demands for transparency.

Unlike a decade ago, they are expected to do more than just manage the accounting and audit teams. CFOs are seen as key to business success, largely due to their central role in data management. In many ways, data has replaced cash as the crown jewel of private capital. 


Yet finding capable accountants and data scientists has never been harder.

Still, expansion remains the overarching goal of GPs. Co-sourcing is the best way for CFOs to align their operations with growth strategies and turn data into a driver of efficiency and profit.

Co-sourcing resources

Co-sourcing in Fund Administration for Private Capital: A Definitive Guide

Co-sourcing allows fund administrators — along with software vendors and consultants — to help fund managers create a bespoke solution that optimizes their operations. By working within the fund manager’s software, the service provider can help get the full potential from technology — and draw on their organizational experience to recommend tools or solutions to target particular pain points. This process starts with the configuration of a solution and ends when it is fully customized to a firm’s needs.

Ultimately, it’s all about how you deploy data to its maximum effect, and the options are limitless when fund managers have full control of their data.

4Pines Fund Services’ Thought Leadership

Allvue

  • Whitepaper: Co-Sourcing: The Next Frontier of Fund Administration
  • 4Pines on Why Co-Sourcing is the Future of Fund Administration

SEC links, analyses, etc.

  • Press Release: SEC Adopts Amendments to Enhance Private Fund Reporting
  • Statement on Final Amendments to Form PF to Require Event Reporting for Large Hedge Fund Advisers and Private Equity Fund Advisers and to Amend Reporting Requirements for Large Private Equity Fund Advisers
  • Final Rule: Form PF; Event Reporting for Large Hedge Fund Advisers and Private Equity Fund Advisers; Requirements for Large Private Equity Fund Adviser Reporting
  • K&L Gates: The SEC Significantly Expands the Scope of Form PF
  • Sidley: SEC Adopts Significant Form PF Amendments

Let’s climb higher together

Modernize your back and middle office by partnering with career private equity professionals to manage your administration and reporting.

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