Richard Browne, head of private equity and real estate fund administration at Credit Suisse Fund Services (Luxembourg) S.A. (“Credit Suisse”), says the right blend of people and technology is the key to building scale, boosting productivity and enhancing services to clients.
Why did Credit Suisse create its Private Equity Competence Centre?
The Private Equity and Real Estate department was founded back in 2014. In 2018 we decided to upgrade our classic Fund Administration and Transfer Agent team setup into the Private and Real Estate Competence Center. The driving force was growing demand from our client base, as family offices, pension and financial institutions and asset managers increasingly targeted the private equity and real estate asset class. A result from this effort saw a 60% growth in PERE assets under administration in 2019. From 13 accountants and administrators covering the activity in 2018, our team has doubled in size and we expect to reach 30 later this year.
Alongside the competence centre we were fortunate to utilise a suite of established complementary services to support the private equity and real estate teams and clients, including anti-money laundering, know-your-customer due diligence, fee management, legal and financial reporting, corporate secretarial and client service management. With the support of these dedicated teams of experts in their fields the PE competence centre can focus on the accounting and administration activities.
The PE competence centre, whose accountants and administrators average 10 years of experience, service strategies including direct and indirect PE, and private debt. To support our ongoing growth, we recently established a small expert team in Poland – helped by an existing centre of excellence for traditional funds in Wroclaw, Poland.
“ In creating the PE competence centre, we focused on servicing all our clients’ needs and identifying the skill set to build a scalable and robust operating model.”
How do you leverage your expertise to service your clients?
We bring solutions to our clients from the fund’s inception and throughout its life cycle. We invest significant effort in the client engagement stage, when our fund structuring team helps select the appropriate fund structure and legal framework. Then a dedicated onboarding team takes the lead in setting up the structure and engaging with stakeholders such as service providers, auditors, lawyers, banks and tax experts. The PE team is closely involved in fund structuring and planning for operational complexities.
In addition to our main focus of delivering the funds net asset value calculations and reporting to investors, during the lifecycle of the fund our team takes an active participation in the audit and financial statement preparation and supports our clients in achieving the regulatory deadlines. We follow the evolution of accounting and reporting standards and engage regularly with professionals and industry groups in Luxembourg in areas such as audit, tax, reporting and legal. Keeping our team members up to speed with the fund industry is an opportunity to create value for our clients.
In creating the PE competence centre, Jaysen Sundrum as head of the PE competence centre and I focused on servicing all our clients’ needs and identifying the skill set to build a scalable and robust operating model. On top of accounting experts we have added expertise in reporting and technical experts considering the increased use of technology tools and automation. Furthermore, the PE competence centre is complemented by the expertise of Natalie Ebert, head of our Real Estate competence centre and her RE team.
What challenges and opportunities lie ahead for private equity and real estate over the next five years?
The biggest challenge in PE and RE is dealing with the vast amount of unstructured data. We must be agile in adopting new technology to build scale, boost productivity and enhance our service offering to survive in an increasingly competitive landscape, which requires the right blend of people and technology supported by investment.
With our IT architecture team in Zurich, we reviewed our technology landscape and established a new PE administration target operating model by gradually building interconnected solutions rather than a complete overhaul of our platform – the sweet spot between innovation and disruption.
At the base of our structure is data. In the past 18 months we have revisited our data model with initiatives including data cleansing, centralising static data input and establishing governance and control. Doing this correctly lays the foundation for a solid structure that is prepared to adopt technological solutions such as robotics, AI and integrated reporting. Removing manual data entry is a key achievement because it’s inefficient, prone to error and unpopular among young professionals. Our team should add value where clients need support: delivering critical data and reporting that enables them to make daily investment management decisions for their PE and RE funds.