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When ‘Data is King,’ automated systems can be the crown jewels

No longer science fiction, the skilled use of data automation can give investment managers a big competitive advantage

 

By Michael Trinkaus and Michael Gull

 

Automation long ago ceased being the stuff of science fiction stories. But it still requires great experience and a deft hand to maximize automation’s value. 

A process once carried out with paper and pencils and then via email and spreadsheets is now the realm of automation and other innovative technologies that give savvy investment service providers the tools needed to quickly process enormous amounts of data. These tools help firms and funds make better decisions, boost productivity and reduce overhead.  

[To hear more on our conversation on this, check out Episode 1 of the Private Capital Strategy Series] 

Back in the 1990s, the mantra of investment managers was “Cash is King.” While quick and reliable access to cash remains essential, we believe the new mantra should be “Data is King.”  

Everyone wants access to the most useful data as quickly as possible. That’s what we do at 4Pines Fund Services. We give our clients the best access to data they’ve ever had.  

This is not a cookie-cutter approach. We are dedicated to providing clients with access to unique metrics that will help them make more informed, real-time decisions about specific strategies or investments. We don’t set out to undercut the competition on price but rather to enhance the value we provide through automation and other cutting-edge technologies that promote integration and collaboration – at competitive costs. We don’t see this combination elsewhere in the market.  

Most chief financial offers today could write a long wish list for what could be done better in the financial industry, whether on the fund administration side or the private equity side. Like many General Partners, we’re discussing the issues, but unlike many General Partners we’re actually addressing those same concerns. But we come at the problems from a perspective that maximizes ease and efficiency. 

An example: the traditional subdocument process is time-consuming, requiring someone to manually fill out 50 to 60 pages – sometimes more. We reduce that process to the essential sections, decision points and inputs, saving time and reducing the risk of error. The data is then moved, through automation, into a database where our clients lawyers can access it to run their internal review and sign-off process while simultaneously allowing our internal team to review the same data for our required service offerings. 

The data can be integrated into a customer relationship management database, reviewed for tax compliance or moved anywhere else. Automation facilitates the flow, meaning that whether a client has 15 limited partners or 500, access to relevant data is quick and efficient.  

Our technology and operational staff allow us to make this ambitious and cutting-edge system work seamlessly. We like to say that we’re a team of “CFOs for CFOs.” It’s relatively easy to identify problems, but our team goes beyond simply finding solutions to focusing on how those problems can be solved. What it boils down to is giving clients superb intelligence that imparts flexibility and a competitive advantage in a world where there is too much capital chasing too few asset managers. 

At 4Pines, clients don’t have a single point person. They have access to the entire team. Similar to a private equity model, we cultivate a real, integrated collaborative environment for interfacing with clients. Our view is that we partner with our clients to give them access to more and better data and provide it to them in a way that helps them improve their investment thesis. That is what we are built to do.  

Michael Trinkaus is the chief executive officer and co-founder at 4Pines Fund Services. Michael Gull is the firm’s chief revenue officer.