Leading fund administrator offers clarity on fee allocations

WEST ORANGE, NJ (January 18, 2017)—PEF Services, a leading fund administrator for Alternative Investment Managers, presented results and commentary on the recent 2016 PFM Fees and Expenses Benchmarking Survey to an audience of Financial Executives Alliance (FEA) members representing private equity and venture capital firm CFOs in New York City on January 12, 2017.

The 2016 PFM Survey, sponsored by PEF Services, Pepper Hamilton LLP, and WithumSmith+Brown, examined fee and expense practices among U.S. fund managers.  The survey, directed to alternative fund managers, addressed questions regarding payment for various fees and expenses, comparing and reviewing fee-related practices across the industry.

The PEF Services and FEA event featured an interactive presentation and discussion led by Anne Anquillare, PEF Services CEO and President.  Anne was joined by speakers Eve Mongiardo, COO and Partner of Irving Place Capital, Gerson R. Guzman, Managing Director & CCO of Corinthian Capital, and Hank Boggio, Chief Revenue Officer for PEF Services.

The discussion examined transparency, compliance and the general understanding of standard procedures across a variety of areas, including reporting templates, industry events, co-investments, technology, as well as legal and administrative services.

“The ongoing stream of new regulatory requirements covering fees and expenses can be overwhelming,” said Anne Anquillare, Chief Executive Officer and President of PEF Services. ”CFOs can find themselves caught between their primary fiduciary responsibility to their investors and the SEC.”

In light of the PFM Benchmarking survey results, the group noted the challenges underlying the support for standardization of ILPA best practice templates.  The ILPA templates are considered onerous and difficult for many middle market GPs to deal with, so they have pushed back on their adoption.

“Different investors have different needs, demand varying information and level of detail.  As a result a one-size-fits-all reporting approach may not make sense for all general partners,” commented Gerson R. Guzman, Managing Director & CCO, Corinthian Capital Group, LLC.

Regarding fee and expense allocations which are not addressed in the PPM, LPA or policy documents, it was noted that decisions made by the management team or CFO alone creates a lot of risk for second guessing and non‐disclosure issues. Also you get into a case‐by‐case trap which can lead to inconsistent treatment. Key takeaway – have an expense allocation policy (principles-based) that is reviewed and approved by the LPAC annually.

“The SEC’s enforcement actions have given fund managers a better idea of where they stand with fees and expenses,” commented Hank Boggio, Chief Revenue Officer for PEF Services.  “The push towards standardization of fee disclosures with the release of the latest guidelines serves to elevate the level of trust between GPs and LPs.”

To learn more, visit test.pefservices.com/the-proactive-approach.

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 test.pefservices.com.

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Laura Hills
VP, Marketing
PEF Services
212.203.4685 x180