The automation of Private Equity and Real Estate is as much a necessity as a choice. It is no longer an option to manage a fund in Excel. To succeed in today’s highly competitive market demands setting up new tools to enhance operational capabilities. Rightfully, automating data modeling and analytics is a powerful lever to stand out. How can this be achieved? Why process automation is a game changer?
In an environment of political and economic uncertainty, the asset management industry is undergoing major changes. Players are facing an ever-increasing complexity: a strong regulatory agenda, including AIFMD, Automatic Information Exchange, Circulars 18/698, 19/708; the need for transparency and the need for investors’ autonomy. Managing an alternative investment portfolio is no exception and requires, all the more so, a different approach, particularly in terms of risk management. Manual processes and spreadsheets do not allow efficient data processing, which constitutes a major challenge for players specialising in alternative assets.
Automating regulatory compliance
Regulatory requirements are on the rise. On the one hand, regulation is getting complex. On the other hand, sanctions for non-compliance are increasing.
In an era of digital transformation, it is no longer an option to use manual processes. Yet, many players are still using manual processes. Collateral victims of this lack of automation include regulatory monitoring and preventive risk analysis if non-compliance occurs. Without automation, asset management companies are tirelessly reactive due to their inability to detect and prevent risks before they occur.
The ambition to automate this regulatory area may seem ambitious, but tech developments now make it possible to align regulation and internal procedures.
In this context, Domos FS released a Compliance module. Designed to manage a large volume of data, this web-based solution allows hedge fund managers to
- automate regulatory reporting;
- compliance plan monitoring; and
- delegated function management.
Streamlining communication with investors
While the role of a manager is to identify the best investments, it is also incumbent on them to provide the right information at the right time to their investors. Commonly referred to as Limited Partners, these investors require accurate investment monitoring; access to data to produce relevant and consolidated analyses; and generally systems to assess and select the most profitable funds based on their risk appetite.
Ensuring high-quality communication with these private equity investors is a major competitive challenge. However, steering alternative investment structures is often complex and time-consuming. The same goes for data collection and validation.
Domos FS’s Limited Partners module allows to
- automate the entire investment cycle, e.g. commitments, capital calls and distribution;
- manage investor notifications and documents, e.g. ID documents, investor reports or KYC reports; and
- benefit from an overview of investors.
Enhancing the value of investment processes through automation
The European alternative investment fund industry is facing major changes in operational models. Regulators, investors and auditors are demanding more transparency on processes and operations.
The DOMOS Investments module is dedicated to enhancing the value of investment processes, control and manage an entire portfolio while meeting deadlines. Finally, it allows to manage the entire life cycle of an investment, from the creation of holding companies to the sale of assets, including the management of distributions (dividends, rents…) or the change of ownership.
All in all, collecting and analysing data in the context of reporting is a significant issue that weighs heavily on the alternative sector. In practice, managers are subject to both qualitative and quantitative reporting requirements. It includes the presentation of key indicators based on risk modelling, performance attribution, cash flow simulations, etc. Only automation can meet these challenges.