The South African-owned private banking group, Ansbacher, has launched a fund administration business specialising in European private equity funds and funds-of-funds. Ansbacher hopes to capitalise on the growing demand by institutional investors for private equity funds to out-source their administration, fund accounting and reporting.
Ansbacher Fund Services (AFS) has so far secured authorisation from the UK regulator, the Financial Services Authiority (FSA), to administer UK fund structures, including private equity limited partnerships. In addition, AFS will also offer offshore fund administration services through its offices in Guernsey, Jersey and the Cayman Islands.
Ansbacher admits private equity managers are not well-known for outsourcing administration, but argues that a combination of pressure from both regulators (notably anti-money laundering measures) and limited partners and institutional investors (for lower overheads, better quality reporting and cost transparency) is forcing them to review how they fulfil back office chores such as collecting subscriptions, checking compliance with regulations, and reporting to investors.
“The European private equity community is beginning to understand the benefits of outsourced administration,” says Barry Carroll, Global Head of AFS. “The tough economic climate is forcing managers to focus on their true strengths. As a consequence, cost efficiency and transparency issues are driving managers to review their fund administration processes and question whether this is a core competency. In addition to allowing greater focus, outsourced administration provides more consistent, efficient and transparent reporting, allied to greater security by the use of an independent third party.”
AFS believes that the growing complexity of fund accounting and tax reporting in private equity and funds-of-fund vehicles is putting private equity back offices under pressure to find more experienced and better qualified staff – which (as hedge funds can testify) are often unavailable in traditional offshore locations. AFS also says that (as hedge funds can again testify) that the technology used by existing administrators is often unsuited to the specific needs of private equity and funds-of-funds.
“By locating ourselves in London, we are able to hire the necessary experienced and qualified accounting and private equity personnel that our competitors do not have access to,” says Carroll. “Our research into this market has shown that this has been one of the primary concerns of European Managers seeking an administration partner. In addition, because of our sole focus on private equity and funds-of-funds products, we are offering bespoke technology – using an enhanced version of the Investran system – adapted to the needs of each individual fund or partnership structure, with both General and Limited Partner web based reporting being available within the coming months.”
The Ansbacher Group, which evolved out of the former merchant banking group Henry Ansbacher, is now essentially a private banking group aiming to ply high net worth clients around the world with specialist banking, wealth management, investment advice and fiduciary services out of London, the Channel Islands, the Cayman Islands and the Bahamas and fiduciary services from its offices in the British Virgin Islands, Monaco and Switzerland. The Group is part of the FirstRand Group, one of South Africa’s largest financial services groups.
Investran is a software application developed by Financial Technologies Inc (FTI). FTI describes it as “one of the market leading technology solutions for the private equity industry.” First introduced in 1998, it is now used by 120 private equity funds. Investran provides a multi-currency ledger with integrated partnership accounting and portfolio management functionality.