Podcast

IQ-EQ CFO e-Lab - Evolution of the Private Funds CFO

16 December 2021

IQ-EQ is pleased to share the fifth podcast in our CFO e-Lab series, and is a recording of our webinar, which took place on 7 December 2021. During this session, we sought to discuss the impact of technology and CFO Support services on the role of the private funds CFO. 

In this episode, introduced and moderated by J.P. Harrop, Group Funds Advisor, IQ-EQ, we were joined by the following expert panelists: 

  • Sanjay G. Tolani, Head of Private Markets, Europe, FIS, London
  • Boris Onefater, Chairman & Global Head of Outsourced Services, Constellation Advisers LLC, part of IQ-EQ, New York
  • Razzak Akbar, Chief Financial Officer, Freshstream, London

Following the presentations, we hosted a Q&A session with questions from the audience, which rounded off the session.

 

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Transcript

Spoken content

Speaker 1 (00:10): JP Harrop

Welcome to our new edition of IQ-EQ CFO e-lab. As the private equity, real estate and private industries continue to evolve, we understand that the role of the CFO is transforming into a more critical one than ever before. With this in mind, we have launched a special program in the form of a series of online masterclasses provided by industry experts. What differentiates this program from others is that for each session we have to shed light on both the technical and practical sides of a particular topic. For our session today, we will discuss the role of technology and expert services as the enabler in helping CFOs move away from a back office function to more of a front office function. Indeed the rapid global spread and continued prevalence of COVID-19 has created unprecedented challenges for CFOs who are having to constantly recalibrate their operating models in order to navigate the turmoil triggered by the crisis with travel restrictions, social distancing measures, and other strict health protocols becoming entrenched.

Speaker 1 (01:16): JP Harrop

It is evident that transitioning to a remote work environment is imperative for business continuity in the near term and growth prospects over the medium term. In a post pandemic world, CFOs must increasingly focus on looking at ways to create efficiency within internal functions while ensuring proper capacity planning to take on new business projects and initiatives. This crisis has also underlined the need for robust technical technological platforms to allow for the automation of searching key functions. Aagainst this backdrop, leveraging technology and extra expert services have become more essential than ever to discuss this subject. I'm delighted to welcome to our session today, Mr. Sanjay Tolani, Head of Private Markets for Europe at FIS who had discussed the importance of technology for CFOs, Boris Onefator, Chairman and Global Head of Outsource Services at Constellation Advisers, the firm he set up in 2008. Boris focuses his efforts working with investment management clients and investors, supporting their accounting compliance, middle office governance, due diligence and operational infrastructure needs, and Razzak Akbar, Chief Financial Officer of Freshstream, a mid-market private equity fund focused on the UK and Benelux markets who will share his perspective on the subject.

Speaker 1 (02:39): JP Harrop

Following these presentations, we will open the floor for an audience Q&A. Each presentation will last no more than 10 minutes. It is now my pleasure to kick off the session by handing over to Sanjay. Sanjay, the virtual floor is yours.

Speaker 2 (02:59):

[inaudible].

Speaker 3 (03:03): Sanjay Tolani

I am Sanjay Tolani, Head of Private Markets for FIS in Europe, and thank you for joining today's session. We will be discussing the impact of technology on the CFO and private markets and the key points of today's discussion. We'll start off by talking about the expanded role of the CFO and private equity. We'll also talk about how COVID has changed the role of the CFO followed by a look at the strategic priorities for private equity firm. Once we do that, we'd also talk about the, the investor view, right? The customer is always important, followed by a look at the portfolio side, the asset side, and what the CFO is doing in that area. And finally, we'll finish up by talking about what is a focus area for CFOs as it relates to technology. So the first point is about the expanded role for the CFO in private equity.

Speaker 3 (03:55): Sanjay Tolani

The CFO in our industry is no longer the person who's spending all their time on accounting and financial statements. Over the years, as we know, the remit of the CFO has expanded into other areas of the business and they involve so much more in fundraising. As investors look to better understand the operations and finance platform for funds they are looking to invest in, and the finance teams are also involved in the portfolio side, supporting the investment teams with data collection and also preparation. CFOs and their teams are also increasingly involved in part of the conversation as it relates to the ESG, which are on the minds of investors and something that all funds are really paying attention to these days. So these are some of the examples of the additional responsibility of CFOs. And of course, this can vary depending on the size of the firm, their profile as well as the working culture.

Speaker 3 (04:52): Sanjay Tolani

Now, if we dive a little bit deeper into COVID and how that's affected the role of the CFO, they've been right in the middle of the discussions of how to adapt to COVID. The first focus when COVID hit last year was number one, let's make sure everybody's healthy and in a good place. And after that, the next point was we can't get into the office. How do we ensure that our colleagues have secure access to the technology that's required to go on working as we look to adapt to how COVID has hit, right? And this happened fairly smoothly because investments made by private equity firms, as it relates to technology, when it comes to access have been in place for quite a bit of time now. And also, I think what's been really helpful has been the adoption of cloud and our own experience validates this as more than 90% of our new customers choose to host with FIS for anytime, anywhere access in a really secure environment.

Speaker 3 (05:51): Sanjay Tolani

And the additional challenge which everyone faced was adapting to a virtual work environment from a people perspective, connectivity, as well as communication. And all of us really have to get used to doing meetings on Zoom or Teams or whatever technology we're using. And CFOs have been really instrumental in helping private equity firms ensure that they've got the right platform in place to continue to communicate as a firm and also staying in touch with LPs, obviously, which is very, very crucial. Now, if you think about how you've gone on to look at the strategic priorities of a private equity firm, and as we wait as we start to work our way off the lockdown and COVID restrictions start to ease life in the UK here where I am based is slowly getting back to normal. You know, the focus for CFOs also increasingly on alignment of the strategy of the firms.

Speaker 3 (06:43): Sanjay Tolani

And when I looked at the 2021 annual ENY private equity survey for CFOs, it indicated again, once again, that asset growth continues to be the top priority for private market firms, right? And this is not surprising if you've been following the trends around fundraising and the fact that investors continue to commit more and more capital to private markets. And then depending on the size of the firm and depending on the profile where they are in their life cycle firms also are looking to expand into multiple strategies. So that they are looking to expand the relationship they have with existing investors. For example, a firm that is focused on buyouts or mid markets are seeing a lot of activity in private debt and the creating of articles focused on private debt. That's one example, another example might be a fund of funds.

Speaker 3 (07:36): Sanjay Tolani

They're doing primary investments. They're seeing that there's a real momentum in the secondary markets and they're looking to create a secondary practice. So I think these are all things that are really creating further involvement for the CFO to help their firms to really focus in on how do we adapt to growth, right? It's a good problem to have. How do you adopt growth and as how do you ensure that you are positioned and ready for the next step in the growth cycle? And when you think about the LPs, the change that continues to happen in our industry as it evolves, but so much more interest in the asset class. The larger, more experienced investors have been making investments in people in technology, and they continue to see greater transparency on fund and portfolio data. There are also reporting standards in place in our industry.

Speaker 3 (08:29): Sanjay Tolani

It's been put in place by organizations such as ILPA and invest Europe, but for larger LPs, a lot of them increasingly want to supplement that the data that's provided a standard and they're looking to get into a much more deeper level of analysis, which means that CFOs are increasingly being asked to send custom templates to fill out by the larger LPs. And depending on the size of the commitment that can always have an effect on the data and the responsiveness that a CFO might have about creating a custom data set for a larger LPs. And then, you notice that, private equity firms with CFOs leading the charge, looking to find ways of improving the investor experience by creating much more of a self-service capability, sharing information around dashboards, portfolio data, vintage your information, and really all the things that investors are looking for and making that available on a portal, which means that investors are more and more able to service themselves on an any time basis and get the data as they need it.

Speaker 3 (09:35): Sanjay Tolani

The other area where private market firms are looking to improve and really make sure the service to investors is getting further enhanced is by improving the KYC AML process, which can be repetitive, cumbersome, a little bit tedious, really, not a lot of value there, but it's a necessity. And a lot of private equity firms are focusing on either technology while sourcing is a solution of completing the KYC AML process and trying to use technology to reduce the duplication that sometimes comes into play with the KYC AML process. And when you think about the asset side, the private equity firms are also looking at making sure that they're getting a lot of transparency on the portfolio, there is a lot of data collection, harmonization,  preparation that's required to get their data ready for deal professionals and for investors when it's sent out to them as well.

Speaker 3 (10:37): Sanjay Tolani

And private equity firms are seeing that the responsibility is being passed on much more and more CFO in a support role and their teams who gathered the data, put it into place, so that it's really ready for review and analysis by the deal teams. So really when you think about the role of the private equity CFO, the role is bigger than ever. They're getting involved, really not only in supporting the growth objectives of the firm, but also ensuring that investors are getting the best experience. And they're also looking to support the deal teams and providing value add around the data collection process and ensuring that the information is available in a consolidated cohesive way for portfolio analysis and valuation purposes. And then they talk about the key focus areas for CFOs in the future. All of this really brings to mind that when you have growth on the LP side, you have different types of investors coming into your funds.

Speaker 3 (11:32): Sanjay Tolani

You're also looking at fundraising where you're trying to grow your assets, perhaps go into multiple different strategies. What really is a common theme here is that there's much more data to deal with. And when you've got so much more data to deal with, it's not only held in-house, but it's also potentially with the fund administrator, perhaps like an IQ-EQ who the private equity firm is outsourcing to, it could also be that some of the data's being held in house, if a firm chooses to do the fundamental operation internally using FIS Investran for fund administration, or it could be a combination of both, right? Some firms, depending on their size, their shape, the profile might choose to outsource, but still have an internal system to manage the investor experience, but it doesn't just stop over there.

Speaker 3 (12:22): Sanjay Tolani

And it's also looking at the portfolio side, the data collection that we spoke about earlier, it's also sharing data on the portal. It's looking at deal flow at CRM, and increasingly as a private equity firm is expanding. You find that data is sitting in different silos. And one of the key challenges really is how do you bring all this data together to have one enterprise view? So that potentially gives you the 360 view to enable the deal team to make a much more informed decision on deals. It's potentially having all of information about your investor, about potential investors in one place as well, to accelerate the fundraising process or to perhaps provide a better experience to investors and bring the data together. It gives your organization one view of what the enterprise information looks like. So you've got a really clear understanding about performance, about information, about the investors, as well as key metrics about the company itself, which enables you to have a really aligned view about how you're viewing your information about your company.

Speaker 3 (13:29): Sanjay Tolani

And I think the data coming together, the integration comes into really as a key part of what a private equity firm and a CFO is looking to do at this stage. We're seeing a lot of interest around how do we take all these different lakes of data, bring them all together so we can have a collective view together. And as FIS, we are offering market-leading solutions to our clients and, of course, to the industry for many, many years, but our role is really to make sure that we support our clients by providing them not only the best in class tools, but also ensure we provide the integration capabilities, so when a CFO is looking at choices, they're making around technology in different areas of the business, the integration allows them to choose because the key thing is connectivity. And the key thing is that ensuring that all your different data sources are talking to each other and providing you one collective view on the information.

Speaker 3 (14:27): Sanjay Tolani

And I think some of the changes that were driven by COVID over the last 18 months or so have also created a real move towards digitalisation where information is really available on an anytime, anywhere basis, investors are looking to get access to this data on a much more frequent basis. And really, how do you use that technology? How do you use that platform to provide transparency to investors while increasingly getting sophisticated, while increasingly investing in their own technology, to be able to digest that data and then be able to do their own analysis about what is the risk in their own portfolio? So the LP view is really critical. And as the CFO is looking to potentially bring all this data together, they are also trying to stay on top of trends in the industry, one of the other things that is really centered for a CFO is cybersecurity.

Speaker 3 (15:23): Sanjay Tolani

It's about secure access. It's making sure that they are working with vendors who are best in class and being up to speed with, what does Microsoft offer, what does AWS offer as a data center provider? So that it's really important. The security part of it is something you are able to share and provide reassurance to the investor as well. And as private markets, our industry tends to grow and becomes much more mainstream, there's new firms offering solutions geared towards the industry, which really, it makes it exciting times ahead for CFOs and really some real opportunity to use technology, develop, achieve strategic goals, to continue to improve the investor experience, and also to get ready for the future, which is looking really, really bright. And I wanted to really finish off with that thought. I also wanted to say, thank you very much to IQ-EQ for inviting FIS and myself to be part of this session. And thanks very much you for listening today.

Speaker 2 (16:33):

[inaudible]

Speaker 4 (16:36): Boris Onefater

Hello today, we're going to talk about CFO support services. This service line has been expanding and growing incredibly rapidly because our clients essentially see a lot of value in providing their accounting and finance teams the necessary support. I've never met a CFO who said that they were overstaffed and they had luxury of time. Every CFO, I know, short of time, a lot of work to be done, and they're pressured to get the results and get them quickly. So to the rescue come IQ-EQ. The service line has been in existence for many years, and we are improving and enhancing it all the time.

Speaker 4 (17:33): Boris Onefater

Our… we're dubbing, this is CFO extra support services because this is an opportunity to really help the accounting and finance personnel deliver their best and help deliver projects that are key and important to running and growing the business. Some examples would be developing fund manager's back office and middle office, basically providing the entirety or components, controller accounting, and finance and bookkeeping functions throughout the organization. Budgeting is a key component of a successful business, and we can help with forecasts, budgets as well as underlying technology to make sure it all works. Overcoming financial challenges like cashflows is critically important. Navigating events like audits come every single year and one is over, and the other one's just starting again. System implementations, data migrations, and you're going out for a capital raise. You need the support necessary support that you may not readily have. Well, now you do. Helping you achieve specific goals like preparing an exit strategy or preparing for an IPO also requires a lot of resources, but it's not just about the fun side of things.

Speaker 4 (19:17): Boris Onefater

It's also the management company accounting, it is also about financial and operational controls. It's also about the fund oversight. It's basically the full package to assist the CFO, or from time to time, we can become a CFO as well to help you in your growth. CFO support services team augments, and works with your in-house CFO controller and their teams to provide critical functions that may be necessary for your growth. So how can we bring value to the organization? One is potential cost savings. You don't have to hire a full-time person if there isn't enough work for two full-time persons. We have clients who hire us to perform work that's two, three hours a month. Some clients hire us to perform on a full-time basis, but the beauty is a lot of the services we do perform, depending on your documents, private placement memorandums, and foundational documents. This can be borne by the fund equity or attorneys and check your documents. But most of our clients actually do pass this through to the funds.

Speaker 4 (20:37): Boris Onefater

Our team can also assist with operational and financial controls, and it's a turnkey access whenever you need it. Actively with the resources, you could turn the spigot on and off, as you need to. You can avoid recruiting and HR headaches and distractions from your business goals. Generally one or two phone calls is all it takes to be able to figure out the right resource, the right expertise for a long-term or short-term initiative as you move your business forward. And sometimes we come with technology if you don't have it, or technology, we could run any technology that's commercially available in the marketplaces and do so all the time with our clients. We can help you with data issues as well as make a consistent internal process. And very frequently, this does make your investors, sponsors feel a lot better. So I wanted to just show you a couple of examples in case studies of how we've worked with others.

Speaker 4 (21:53): Boris Onefater

So in one case, and by the way, there are probably hundreds of cases that I could have brought here today. But, I chose these three because I think they show the depth and the breadth of what we can do. So we had a new fund manager who came to us and wanted to, for us to assist in the launch advisory. So we set them up from soup to nuts, found the service providers for him, even looked at real estate and space. We developed all the policies and procedures, including operational due diligence policies, and got them through, and developed checklists and questionnaire so they could pass the diligence, additional level due diligence. We provided for an initial setup, which included all the controls, both operational and financial controls, documentation of the entire process, and then we continued ongoing support, and for ongoing support.

Speaker 4 (22:56): Boris Onefater

we essentially took down and dealt with the entirety of the back office. In another case, a client came to us and hired us for our operational continuity. What is operational continuity? To alleviate some of the key man risk issues and challenges, having an operational continuity, where we come in and learn the process. We understand what was going on. We document the process and then we leave and that come back on a periodic basis to refresh. So we've done that in this case, a couple of years later, we received the phone call that the CFO is going out on maternity leave and they needed to activate our services, which we've done. When the CFO, a new mom wanted to come back, we essentially transitioned everything back, but because of the value we added, they did want us to come in and help with certain bespoke components of the business.

Speaker 4 (24:04): Boris Onefater

That's a good story. We've had stories of operational continuity where we were brought on on a moment's notice because someone resigned. We had other instances where someone gotten sick as well. So it's a great way for us to be able to learn the process and be on standby, to be able to help our clients in case they need us. Case study three is a client brought us in to help them with a management company, accounting management company. Essentially we were doing the corporate books and records for the management company. We paid bills. We set up all the accounts. We did all the bank reconciliations. We basically took care of everything in the management company, including doing payroll and dealing with the benefits and reported to the CEO on a periodic basis, quarterly is what this client particularly wanted the reporting to be.

Speaker 4 (25:11): Boris Onefater

And in addition to that, we also provided fund oversight. So we did NAV reviews, allocations amongst all the investors. We provided oversight over the administrator, we provided audit support and got them through an audit as well as tax support. So basically the portfolio manager was concerned about managing and we took care of the entirety of the back-office. So those are just some examples, but as you see some assistance that you may need, whether it be temporary, whether it's a function that someone wanted to perform, we're happy to step in on a periodic basis or on a more full-time basis as well, and help you deliver for your clients. Thank you.

Speaker 5 (26:13):  Razzak Akbar

Hi everyone. Very good to be talking to you all today. I'm not going to spend too much time talking about myself, but just a quick high-level background, just so you know who I am. So I'm the CFO of Freshstream. We are a mid-market private equity firm based in the UK and the Netherlands. We launched our first fund back in 2015 with an AUM of 600 million euros. And we are currently fundraising for our second fund. I’m a chartered accountant by trade, but I'm actually also a computer science graduate so technology has always been a very, very key of interest for me as you'd expect, and therefore, as a result throughout my career, I've always been on the lookout for ways to try and automate and improve on efficiencies in everything that I do.

Speaker 5 (27:12): Razzak Akbar

So today's topic on the role of technology for CFOs is indeed something quite close to my heart. And also something I think is becoming ever more relevant, especially in the data-driven world that we live in today. I'm going to begin by asking the question, what is the role of today's CFO? Now, if you ask most people what the role of a CFO is, they'll probably a make a list, not too dissimilar to the one. Here  you have the usual suspects, investor reporting, KPI and value creation, monitoring, budgeting, cashflow management, etc. Now obviously the role of a CFO, I've probably missed out a couple of items here. ESG, for instance is an area that often falls within the remit of the CFO function.

Speaker 5 (28:08): Razzak Akbar

It's indeed increasingly important these days, but I think most people would agree that a fair chunk of what CFOs are responsible for falls into some or all of these key buckets. Now I have a somewhat alternative view. So my view is that most, if not all, of the items on this list actually falls into the role of technology, and not the CFO. So I guess, you might be wondering, if that's the case, what is the role of the CFO? The role of a CFO in my view is actually decision-making full-stop. Now this is what we, as CFOs, should be focusing all our time and effort on which unfortunately is not always the case, but this is what we are actually paid to do, and not all the other items that we had on that list.

Speaker 5 (29:14): Razzak Akbar

I guess that leads us to the question of how should CFOs go about leveraging technology to the maximum extent possible. The best approach I think is to take a high level approach and map out all the key inputs and outputs of the function that you would like to automate and streamline. So, the ideal system environment is one where the only inputs that ua as CFOs are responsible for are those that require decision-making and analysis and all the other inputs should be automatic. So I'm going to give you an example of how we designed our system environment for the reporting function, here at Freshstream. Now, the first thing we did was identify all the inputs of our reporting function across our three main reporting pillars. So here you can see ESG reporting, fund level reporting and portfolio level reporting.

Speaker 5 (30:23): Razzak Akbar

Then we further split our inputs into internal inputs. So, these are the inputs from my side, which you can see here on the first row, and external inputs. So, this is from external third parties, and this, you can see on this, on the second row, so you'll notice that the internal inputs, those ones that our internal function is responsible for, is largely focused on decision-making inputs. So, mainly being the setting of performance targets and the analysis of the ESG metrics, KPIs and value creation initiatives and etc, and all the other inputs have been mapped out to external third parties, so my CFO function does not get involved with any of these data inputs. They're all managed either by outsource service providers, such as our administrators and consultants, or directly by portfolio companies.

Speaker 5 (31:29): Razzak Akbar

So, here you can see this includes ESG emissions, data, financials, KPIs, and BCP updates etc. So the next thing we did was map out our systems requirement. So here you can see, we decided on three key systems, one for ESG, then we have a portfolio monitoring system and also BCP management and tracking system. There's a lot of questions that need to be answered when you're deciding on which system you will implement, questions like will you use an off the shelf package or a bespoke solution? Who's going to maintain the system. Are you going to maintain it internally, or will you have a managed service from your service provider? Are you going to use a single Jack of all trades one single system, or will you use a specialist system for each key area?

Speaker 5 (32:36): Razzak Akbar

For instance, ESG, there's a lot of specialist packages out there that focus entirely on ESG now, and obviously there's no right or wrong answer to any of these questions, and it does depend largely on your internal firm requirements, budget and resource capacity, but I would say there are two things that are quite important when you're deciding on your system requirement. The first one is compatibility. So it's quite important that all the systems must integrate and collaborate, and not only between themselves, but also between the systems that your external service providers, consultants, portfolio companies use to input their data. Data should be able to migrate seamlessly between the systems and in a format that iis compatible across all the different platforms, and this is quite fundamental to ensure that the system acts cohesively as essentially one single system.

Speaker 5 (33:46): Razzak Akbar

And as you can see, there's a lot of red arrows on my chart, and you can see all the various different systems are all linking into each other. The second important thing I would say is scalability and flexibility, so your system environment must be able to scale up, so you can easily add new investments, new funds etc, and it must also be flexible. So you can easily change the type of data that you want the system to handle and manipulate. So, compatibility, scalability, and flexibility, I would say are key attributes that you want to at least give some thought to when designing your system environment. And then, finally you need to map out all the outputs that you want the system to automatically generate.

Speaker 5 (34:49): Razzak Akbar

So for us, this was our ESG reporting, our quarterly investor reporting that goes out and our internal, interactive power BI-based dashboard. So all of these reports for us, they're automatically generated from the systems that we have implemented, and also from down the line data inputs. And that’s it really. And once you've designed your system environment at a high level, the rest of it generally falls in place. For us, the focus was on leveraging technology as much as possible to ensure that the internal reporting function is focused mostly on the decision-making side of things. And we just let technology do all the rest. So this obviously gives me a lot more time to be able to focus on other core parts of the business. That's probably all that I have time for today. Thank you all for listening, and I hope you found at least some of it useful, but now obviously I am happy to open the floor to any questions.

Speaker 2 (36:16):

[inaudible]

Speaker 1 (36:19): JP Harrop

Thank you very much, Boris, Sanjay and Raz for those insightful thoughts. Now we can move to our Q&A part of the program. I'd like to start with a question first for Boris. Boris, what are the main advantages to using CFO services?

Speaker 4 (36:33): Boris Onefater

Thanks very much, JP, a great question. So, first of all, it brings the resources on as needed basis directly to our clients. Most of the time, depending on the docs, these services can be borne and paid for by the funds. And probably the most important thing is real expertise at the time we need them, they're available and we have a resource pool throughout the organization. We have hundreds and thousands of people who would be able to help on an as needed basis with almost any issue. And that's probably the most valuable component of the service.

Speaker 1 (37:17): JP Harrop

Excellent. Thank you Boris, Sanjay next for you, how has the LP drive for transparency influenced private fund CFOs in the use of technology?

Speaker 3 (37:31): Sanjay Tolani

Thanks, JP. I think that the LPs in the industry have over the years, increasingly, been looking for more and more data and transparency as it relates to the asset side, as it relates to performance, as it relates to fees, and it's really forced private equity firms to get better organized, but having the information available so that they could share it with LPs on a timely basis. And some of the questions are standard questions that you would be familiar with, but at the same time as new and new profiles of LPs invest in private equity, you find that the types of questions coming in are a little bit more nuanced. So I think to get ready for this, private equity firms CFOs, have been really focusing on how do you get better organized using the technology, getting the data in one place and providing the tools so that not only is the private equity firm internally as an investor relations team and a finance team, able to respond to investor requirements and requests for data, but also adding in the self-service component by providing direct access to interactive data to LPs as well.

Speaker 3 (38:42): Sanjay Tolani

Now I think this has been a really big focus because LPs the customer is at the end of the day, the stakeholder you want to look out for the most. And I think this trend to drive for transparency is going to continue as the industry continues to

Speaker 1 (38:55): JP Harrop

mature. Thank you for that. Raz, one for you. Will the next big move for private fund CFOs be to shift their focus from technology to data?

Speaker 5 (39:07): Razzak Akbar

So that's a good question JP. I think it's one that gets asked quite a lot these days. Now I might not be giving you the answer that you're expecting but I do think that technology and data, they kind of go hand in hand, so I don't think you can have one without the other, at least in my opinion. Now we all know, obviously data is the key buzzword that everyone's using these days, but I think what's more important is what you do with that data. So, how well can you analyze and make sense of that data? And then subsequently make decisions on that analysis, and this I think is where technology kind of needs to fill in the gap. I think there is one problem a lot of firms have is where they're now starting to collect all this data, but unfortunately they're starting to get a little bit lost on what to do with it all. So while there's increasingly more demand for more data, there will be, I think, a greater shift towards technology. And so things like artificial intelligence, machine learning and etc, to help us interpret that data at a much more granular level, and then oversee, hopefully, helping us and portfolio companies make better decisions.

Speaker 1 (40:36): JP Harrop

Okay. Thank you for that Raz. Boris another one for you. How quickly can you onboard a new client?

Speaker 4 (40:43): Boris Onefator

Actually fairly quickly we've onboarded clients in less than a day. Essentially we get the phone call that someone needs to come in. In this particular case, the CFO, had resigned abruptly and we come in, we're in the very next afternoon, trying to onboard, generally we like between two weeks and 30 days, give or take to make sure that there's a proper transfer of knowledge, but it is much, much, much quicker than going out and recruiting and waiting for someone to come back. So we're really, really doing it quickly.

Speaker 1 (41:22): JP Harrop

Thank you. And another question for you, Sanjay. What do you see as the top technology priorities for the private fund CFOs for say the next 12 to 24 months? Great

Speaker 3 (41:33): Sanjay Tolani

question there, JP, I think as private equity firms are looking to adapt to the next stage after COVID technology in place to really help people work remotely is in place already. They're focusing on ensuring that it's optimizing the remote work that people are already used to. Beyond that the market, the industry is growing so quickly firms are increasing their asset size. Private equity firms are diversifying into different asset classes, that's private debt or infrastructure, with all of these different moving parts. You know, maybe the question, the point about data being a buzz word, it's really looking at the different islands of data that are existing within private markets firm, whether it's at the fund administrator, whether it's stored in-house or perhaps it's at a third party outsourcing firm. The challenge is really how do you bring all that information together? So it's available at the fingertips for investment managers, for investors, so that they are able to access the information number one, and for deal teams to have the information available to make the best possible decision based on real-time information. And it's also, I think, making sure that investors have the best experience by providing information that they require, and also a self-service platform.

Speaker 1 (43:00): JP Harrop

Thank you, Sanjay. Raz, another one for you, maybe a bit of a personal one for you, perhaps you can describe some of the challenges you went through within Freshstream and setting up your system since environment when you came on board.

Speaker 5 (43:15): Razzak Akbar

Sure. I'd love to be able to sit here and say that it all went smoothly with no issues at all, but I would be lying. It was very much a trial and error based approach. It wasn't easy. We did learn a couple of lessons and to be honest, we're still learning and we're always looking to improve on how we do things and that's obviously never going to stop, so some of the items I mentioned in my presentation in fact, for example, the importance of making sure that all your systems are compatible, scalable and flexible, they all came from our experience of setting up our infrastructure. We are also very lucky that our service providers that we partnered up with were very helpful, especially the ones who helped set up our portfolio monitoring platform.

Speaker 5 (44:12): Razzak Akbar

They were very flexible and adaptable, and fortunately, to my ever-changing needs, they were very, very patient with me as well. I would however say that it works two ways. So, the service providers, they've also themselves learned quite a lot, so it's been an iterative process for all of us really. I guess my final piece of advice would be to do your research, and make sure you do choose the right service providers, which at least for us has been quite important.

Speaker 1 (44:47): JP Harrop

Thank you for that. Very sensible advice. I've got a final question for Boris here, and I guess I'd be interested in knowing how do you interact with the administrators in your business, whether it is with IQ-EQ or whether it's with another provider?

Speaker 4 (45:03): Boris Onefater

It's actually quite dependent on who the administrator is. Generally we are, as the outsource CFO support function, placed in a position to oversee the administrators. So we function from a check and balance perspective, as an oversight. So we review the functions that the administrator performs on a periodic basis. We review the reconciliations, we look at how the transactions have been recorded, but essentially we're there to provide oversight in many instances in overseeing the functionality of what an administrator does. We also supplement an administrator as necessary to make sure there are no gaps between where from the firm's perspective to the administrator perspective. So we fill in that void and gap, as necessary, to support and whether the administrator is IQ-EQ or a different administrator, for us, it doesn't matter. We basically come into the workflow and just function as your internal team would under all circumstances,

Speaker 1 (46:23): JP Harrop

That brings a close to this edition of the IQ-EQ CFO e-lab. I'd like to thank, Boris, Sanjay and Raz for participating, and I'd like to thank all of those watching for your attention. So thank you very much.

Speaker 2 (46:47):

[inaudible].