Leading fund administrator offers insights on strategic alignment of expense allocations
WEST ORANGE, NJ (November 1, 2018)—PEF Services (“PEF”), a leading fund administrator for alternative investment managers, presented results and commentary on the latest 2018 PFM Fees and Expenses Benchmarking Survey: Everything is Becoming More Granular, to an audience of Financial Executives Alliance (FEA) members representing private equity and venture capital firm CFOs in San Francisco on October 24, 2018 and in Palo Alto on October 25, 2018. The presentations previewed the results of the pfm (private funds management) survey released today.
Conducted every two years, the 2018 PFM Fees & Expenses Survey, sponsored by PEF Services, Pepper Hamilton LLP, and WithumSmith+Brown, was directed to U.S. based private equity fund CFOs and CCOs regarding their fees and expenses policies, comparing and reviewing fee-related practices across the industry. Their responses provide key insight into the extent to which the industry has moved towards taking a more transparent approach to this challenging area.
The PEF Services and FEA events featured an interactive presentation and discussion led by Anne Anquillare, PEF Services CEO and President. Anquillare’s presentation was directed to an audience of financial executives representing private equity and venture capital firms on the topic entitled “How Your Colleagues Approach Management Fees & Expenses.”
The discussion examined the results of the 2018 pfm Fees and Expenses Survey compared to prior surveys. Anquillare highlighted areas where practices are still in flux for VC and PE funds; the areas of scrutiny by investors and/or regulators; the forces and pace behind industry standardization; and a 2020 Global Investment Performance Standards (GIPS®) preview.
“This year’s survey gives clear indications that GPs are becoming more selective in exactly what they charge to the fund,” commented Graeme Kerr, Special Projects Editor, PEI Media. “That’s partly the result of a crackdown by the Securities and Exchange Commission which has resulted in millions of dollars in fines for inadequate disclosures. It’s also a reaction to the success of the drive by Institutional Limited Partners Association for greater transparency.”
PEF is nationally recognized as one of the top boutique fund administrators and back-office specialists for both General Partners and Limited Partners in the alternative asset space. PEF’s services include partnership accounting, financial reporting, capital call and distribution processing, investor capital account maintenance, audit and tax return support and coordinated fulfillment of all investor deliverables.
The rapid development of the private funds industry over the last two decades has brought increased demands from regulators and investors. That has encouraged the growth of third-party valuation and fund administration services to support the back office. This has picked up speed since the 2008 financial crisis. GPs have adjusted to the more mature landscape by improving the way they select external service providers to take advantage of the growing number of specialized services.
“This year’s pfm Fees and Expenses Benchmarking Survey shows that investor-facing services such as side letter costs, fund administration, portfolio valuations and legal fees are typically picked up by the fund,” said Anne Anquillare, Chief Executive Officer and President of PEF Services. “This can be regarded as an alignment of interest between GPs and LPs because the fund’s back office is primarily servicing the investors.”
To read the full article, click here: Aligning All the Interests.
About PEF Services LLC
PEF Services provides high-value, high-touch Fund Administration solutions supported by senior professionals with extensive experience in alternative investments. PEF has a 15-year track record of delivering cost-effective solutions to Funds and General Partnerships, including Buyout, Venture, Real Estate, Special Purpose Vehicles, Mezzanine, Credit, SBIC, and Fund of Funds. The firm’s LP Administration Solutions Group (LPAS) focuses solely on meeting the unique administration and data needs of limited partners investing in illiquid alternative assets. In partnering with PEF, firms increase operational efficiency, reduce and control operating costs, improve focus on core capabilities, and gain access to experts in private capital back office operations. For more information please visit www.pefservices.com.