The private markets continue to grow, with fund sizes and fund managers getting progressively bigger. BlackRock’s recent tie-up with GIP is widely anticipated to kick start a wave of consolidation across the industry, whilst data from PEI suggests the largest funds see an increasing share of total capital committed to the asset class.
Against this bigger is better backdrop, scalable and efficient investor onboarding processes are no longer a nice to have. We look at how, through connecting fund managers and investors within a centralised hub, an investor clearing house supports raising bigger funds and offering a better investor experience.
Scale
Raising bigger funds across a wider pool of investors requires scalable and efficient onboarding processes to approve 100s or 1000s of investors. By connecting fund managers with pre-approved investors, an investor clearinghouse accelerates the fundraising process by eliminating the requirement to verify investors multiple times over.
Investor expectations
Retail investors expect a seamless buy-button investment experience akin to public markets investing. Whilst institutional investors, seeking to rationalise GP relationships with fewer, larger firms expect a joined-up, “whole firm” approach. An investor clearinghouse delivers on these objectives with a single sign-off for investors, in one platform with support from a team of experts on hand 24 hours a day.
Regulatory compliance
Remaining compliant with evolving regulatory requirements and updates to sanctions and enforcements lists is a growing challenge. A central source of data, monitored and maintained by a trusted third party provides peace of mind for fund managers. Investors benefit by keeping one profile up to date, saving time and giving them privacy and control of their personal information.
Fundraising dynamics
Fund managers are raising funds more often, from a much wider pool of investors, across a range of strategies and jurisdictions. There’s also a growing trend towards fundraising on and ongoing basis with evergreen or hybrid structures. Fast access to accurate and up-to date investor information supports this approach.
Efficiency
Higher interest rates and a challenging fundraising and deal-making environment have pushed cost-cutting and efficiency savings up the agenda. An investor clearing house streamlines onboarding processes, reducing the time and costs associated with fundraising.
With 40,000 investors across 5,600 funds and 300 managers connected via our trusted hub, IDR is The investor clearing house for the private markets. Discover our solutions now.
