By: Kimberly Kale
Head of Product - Back Office
May 20, 2021
For GPs in the alternatives market, relying on outdated back-office processes doesn’t just create inefficiencies – it also adds risk.
The strong fundraising environment of recent years has seen many alternative investment fund managers significantly grow their assets and investor base. It has also highlighted the strengths and weaknesses in many of their back-office related processes.
Particularly for GPs reliant on Excel, the resulting increased workflow has meant that many spreadsheet-based back-office teams are questioning the ability of their current systems to accommodate new information complexities.
Legacy tools have, in effect, hit a brick wall.
Solutions like Excel are no longer fit for purpose and are unable to keep up with the complex fund accounting, tax reporting, and LP communication requirements many managers are now facing. Recent market trends – like the dramatic shift to remote working and the increased need from LPs for transparency – have highlighted the collaboration and security deficiencies of the Excel-based operating model.
The fact is, for all the flexibility spreadsheets offer, Excel’s use as a data repository and reporting mechanism is challenging even for small firms. As companies grow, so do the difficulties involved – and the risks.
How Excel creates operational risk
- Multiple versions of workbooks emailed back and forth create data management chaos
- The lack of a “single source of truth” among data sets makes it difficult to audit processes and rectify issues
- Sharing documents via email exposes sensitive data
Allvue’s fully integrated, end-to-end platform provides back-office teams with a scalable solution, whether they’re a start-up or an industry leader. Our solutions – including true general ledger fund accounting software designed specifically for the alternatives market, a CRM that can connect your entire firm, and customizable business intelligence reporting tools – can significantly streamline and de-risk operational processes.
How Allvue helps: Streamlined Collaboration
Allvue provides one source of truth for all your alternative investment data. This means teams don’t have to create multiple versions of Excel workbooks (waterfall-v1.xls, waterfall-v2.xls, etc.) and manual transfer data between systems.
Instead, the data in your fund accounting system is the same as in your CRM and as in your client portal.
Teams across your organization can collaborate more easily and with less risk of data being corrupted or lost as it moves through the investment lifecycle.
How Allvue helps: Improved Data Control
Quality control and data integrity is another major issue that’s inherent in any spreadsheet-based accounting and reporting process, especially as the amount of data grows. Having your data consolidated on Allvue’s system drastically improves the ability to audit processes, identify errors, and correct them.
And, besides improved auditability, a streamlined data management system also allows managers to meet the increasing demands from LPs for transparency and quick answers to complex questions. Updates on potential cashflows, lines of credit, portfolio company statuses and the like can be answered in the click of a mouse. And, even more powerfully, GPs can provide LPs with self-service reporting by sharing access to the underlying data as well as customizable dashboards.
READ MORE: In Conversation with Lionpoint Group: How to Build a Data Strategy
How Allvue helps: Automated Processes
Manual work isn’t just a time suck. It also introduces more risk into processes – via fat-finger errors, overworked employees, and repetitive and duplicative processes.
Allvue allows you to automate significant portions of your workflow, helping cut down on these risks and free up your time.
- Our integrated system simplifies the process of a capital call, reducing the workload from a matter of days to a matter of minutes.
- Our Fund Accounting solution is able to handle even the most complex subsequent closings, simplifying the creation of entries across the process and capable of rebalancing even across entities.
- Our Waterfall Automation add-on allows teams to model and automate distribution waterfall calculations in a way that can be customized to your existing workflows.
READ MORE: Distribution Waterfall Automation is a Reality
An accounting and reporting solution that can grow with you
As firms grow, legacy tools will only complicate processes, pull down their bottom line, and introduce risk. That’s why more and more managers are moving to a cloud-based operating platform rather than struggling to keep pace by using spreadsheets to support their back-office.
Allvue’s robust and flexible set of investment software solutions breaks down barriers, informs key stakeholders and arms you with unparalleled investment intelligence. Across accounting, management, reporting and more, Allvue offers an adaptable investment software system that empowers superior investment decisions.
More About The Author
Kimberly Kale
Head of Product - Back Office
Kimberly is responsible for back office product management at Allvue. She joined Allvue’s predecessor, AltaReturn, in 2009 and has over 25 years of software management, including 18 years servicing the alternative investments industry. Prior to joining AltaReturn, Kimberly spent seven years with FIS/Investran, first in New York, and then transferring to London to manage the EMEA implementation team. She began her career at KPMG Public Services practice in Washington, DC, and moved on to implement ERP solutions for various insurance and healthcare clients. Kimberly holds a Bachelor’s degree from Vanderbilt University and is currently based in Allvue’s Miami headquarters.
