Leading fund administrator offers insights on strategic alignment of management fees
WEST ORANGE, NJ (November 10, 2020)—PEF Services LLC (“PEF”), a leading fund administrator for alternative investment managers, provides expert commentary on the latest Private Funds CFO Fees and Expenses Survey 2020. The PEF Services commentary is included in the comprehensive results recently published in the latest issue of Private Funds CFO.
For the past several years, regulators at the Securities and Exchange Commission have increasingly focused on fee and expense violations in private equity. To shed light on these issues and to provide GPs with a benchmark, Private Funds CFO has again partnered with PEF Services, Troutman Pepper and Withum to survey CFOs and industry professionals to ask about their current fees and expenses practices. Conducted as a biennial survey, their responses provide key insights into steps the industry has taken towards a more transparent approach to this challenging area.
“As this is the fourth time we’ve conducted this biennial survey, some interesting trends have begun to emerge,” commented Chase Collum, Special Projects Editor, PEI Media. “Management firms are paying a lower percentage of correction costs and penalties incurred after SEC examinations, and the cost of fund administration is more commonly paid for by the funds themselves than it had been in previous years.”
PEF Services is nationally recognized as one of the top Private Capital fund administrators supporting multiple fund types and investments including Buyout, Venture, Emerging Managers, Real Estate, Debt, Fund of Funds, Co-investment, SPVs and SBICs. PEF’s services include Fund Accounting, Financial Reporting, Administration and Compliance, Capital Management, AML/KYC Investor Services, Treasury Services, Consulting and coordinated fulfillment of all investor deliverables.
Investors continue to express concerns about fees paid to private capital fund managers. And while carried interest clearly aligns with performance for investors, management fees are more contentious. But, how does a firm operate without income? This obstacle is especially problematic for the next generation of managers who need a budget to attract talent and build infrastructure.
“This year’s Fees and Expenses Survey confirms that viewing commitments to private equity as an expense management exercise can be detrimental,” said Anne Anquillare, CFA, Chief Executive Officer and President of PEF Services. “Unless investors and GPs can both understand and easily explain/disclose information about management fees, they will be a constant source of pain for the industry and could dampen our industry’s ability to foster the next generation of firms.”
To read the full article, click here: Management fees are all about alpha and alignment.
About PEF Services LLC
PEF Services is the new standard in providing high-value, high-touch Fund Administration services and technology solutions that elevate operational performance to drive and support sustainable growth. Supported by senior professionals with extensive experience in alternative investments, PEF has a track record of nearly 20 years in delivering cost-effective, best-in-class solutions to Funds and General Partnerships, including Buyout, Venture, Emerging Managers, Real Estate, Debt, Fund of Funds, Co-investment, SPVs and SBICs. Additionally, the firm’s LP Administration Solutions Group focuses solely on meeting the unique administration and data needs of limited partners investing in illiquid alternative assets. PEF’s ViewPoint™ provides clients with a purpose-built portal that delivers greater visibility and real-time access to underlying investment performance data sourced directly from the official books and records of the fund. In partnering with PEF, firms increase operational efficiency, control operating costs, improve focus on core capabilities, and gain access to experts in private capital back office operations. For more information please visit https://www.pefservices.com/.
Senior Vice President