Fund Services and Technology
Explore more articles from our special report on the strategy
Not so long ago, a report on fund services would likely have been received with much head scratching among senior industry figures more interested in the sexier activities of fundraising and dealmaking. Viewed as the part of the business that ticked over quietly behind the scenes, it simply did not warrant much attention. How quickly things change. It is now front and center of the business. The old moniker – the ‘back office’ – is even considered a pejorative term.
The full suite of factors that have facilitated this perception shift are too numerous to list here, but playing a big part certainly are: the increased level of investor due diligence of operations; the requirement for greater transparency and speedier; more detailed reporting; the volume of regulation and new risks impacting the sector; and a need to seek new ways to demonstrate performance and deliver value-add. Efficient, streamlined and cost effective operations are integral to that equation.
And that brings us neatly to technology. It is clear how critical it has become to deliver top-grade fund services and meet stakeholder – namely investor – expectations. A contributor to this report describes it is as part of his firm’s DNA. Yet it is widely acknowledged that many private real estate managers have been slow on the uptake of technology. There could be many reasons: cost and complexity of searching the market for the perfect product; the time and effort involved in implementing and updating software; finding the right skillset to expertly manage it all. On top of that is the mindboggling pace with which technology changes. How do you know that the systems you integrate today will not become obsolete in five years’ time?
Of course, the technology journey does not end at the door of investment management firms. There is also the performance-enhancing technology in the properties in their portfolios. Some investors have spotted an opportunity to back a new breed of funds dedicated to capitalizing startups that are developing innovations specifically for use in the built environment – it is aptly named proptech investing. These fund managers and investors see a future where real estate and technology become one.
Technology is too often equated with business disruption. Throughout this report, it is clear it is time to think of it as “business-enhancing” at both the management company and asset level. The core message throughout is that if you are one of the managers yet to fully embrace technology, it really is time to step up. I’ll leave you with the wise words of one of our contributors: “Adapt or get left behind.”
Enjoy the report,
Special Projects Editor