US Private Equity Firms' Appetite for Outsourcing Rises

While not a very pressing issue yet, the demands of new regulations such as Sarbanes-Oxley in the US and Basel II in Europe is on the minds of many investors. Another issue is that private equity firms are looking to leverage into technical expertise, existing expertise rather than building up a team. Another reason private equity firms are pursuing an outsourced option is the sense from LPs that a third party provides a control mechanism to mitigate risk.

Other demands from LPs are also forcing private equity funds to outsource administration. As a result, funds are looking for administrators with a broader suite of services such as web-based reporting as a move towards paperless operations.

Outsourcing your private equity administration will enable you to focus on core competencies and reduce the time and cost of supporting an in-house administrative department. Having SS&C GlobeOp® as administrator will add value by providing you with the resources of dedicated private equity accounting and administrative professionals. SS&C has already done the research to determine the best tools available. In addition, SS&C has established industry-specific systems that can eliminate your cost of acquiring a comprehensive portfolio management system. SS&C's resources will also provide you with administrative scalability as your business continues to grow.

Cost-saving benefits include:

  • Reduced Human Resource Costs
  • Payroll
  • Recruitment/Retention
  • Personnel Benefits
  • Ongoing Training
  • Reduced Operational Costs
  • Additional Office Space
  • Computers
  • Accounting and Administrative Software
  • Technology Upgrades
  • Document Retention
  • Printing Costs

Most importantly, you maximize the efforts of your existing personnel, focusing them on managing your investments and client relationships.