BNY Mellon Enhances Distribution Waterfall Capability for PE Funds

BNY Mellon has enhanced its distribution “waterfall” capability as part of its private equity fund services.

Distribution waterfalls in a private equity fund establish how proceeds from realized investments will be divided between investors and the fund manager. It is usually the means through which fund managers and principals receive their performance and incentive fees, or “carried interest.”

The enhanced capability, which leverages CapAssure® from Investors Economic Assurance, captures the intricate algorithms and parameters used to calculate a private equity fund’s distributions. The service is fully integrated with BNY Mellon’s private equity accounting platform, which facilitates distribution processing and hypothetical liquidation modeling. BNY Mellon clients who opt for the service will also receive more detailed reporting with the new waterfall capability.

“This major new offering marks the beginning of the end of spreadsheet calculations for private equity funds,” said Alan Flanagan, global head of product management for alternative investment services at BNY Mellon. “Our automated and integrated waterfall solution brings the benefits of a more efficient, controlled environment, and that means improved risk management and more transparent reporting for investors and fund managers alike.”

BNY Mellon services over $160 billion in private equity assets.