Growth in Private Credit Drives Increased Outsourcing
This article was originally featured in Private Equity Wire.
From asset servicing, administration, banking to financing, foreign exchange, and regulatory services, MUFG Investor Services offers a suite of integrated solutions to help streamline operations, mitigate risks and enhance efficiencies. And keeping clients at the centre of everything the firm does is key, according to Daniel Trentacosta, Global Head of Private Markets & Change.
In no more than 50 words, please describe your firm’s service offering and what makes it special.
Daniel Trentacosta (DT): MUFG Investor Services is a global leader in asset servicing and a trusted partner in operational transformation, delivering comprehensive solutions across the alternative investment lifecycle. With more than $1 trillion in assets under administration, our suite of services includes fund administration, banking, payments, fund financing, and foreign exchange overlay.
What are the three key selling points of your business and service range?
DT: Our highly collaborative, client-centric approach enables us to develop tailored solutions by thoroughly understanding our clients’ businesses. We build long-term partnerships to collaborate on operational transformation and develop practical, future-ready solutions. Our deep expertise in private markets and superior platforms ensure seamless execution across a range of complex fund structures.
What economic forces – in Europe and/or globally – do you anticipate having the biggest impact on your business over the next 12 months?
DT: The increased presence of retail investors, deployment of dry powder by asset managers, evolving regulatory frameworks, as well as macroeconomic challenges and geopolitical uncertainties are reshaping the alternatives industry. These forces are fueling growth, specifically in private credit, driving demand for increased outsourcing to provide specialized fund administration, loan servicing, and tailored financing solutions.
How are you preparing for the above?
DT: We are working closely with asset managers to reengineer operating models, implement new technology to boost efficiency, and ensure regulatory compliance. We are expanding our private credit offerings to help asset managers improve loan administration, closing, and servicing, and our expert teams are providing solutions to help clients optimize operations and drive new growth.
What are the key developments to watch in the private markets space, and how is your service offering helping firms navigate them?
DT: As retail investors and fresh capital increasingly move into the private markets, asset managers are reassessing their operating models, and one major trend is the increase in outsourcing front-, middle-, and back-office functions. As a result, our teams are working more closely with clients to become true extensions of their organizations at every level. This, in turns, enables asset managers to focus their teams and limited resources on increasing revenue.
To attract those new investors, asset managers are introducing products, such as evergreens and semiliquid structures, blending commitments of traditional closed-end funds with partial liquidity. Our fee calculation tool, with more than 350 client fee models, is transforming back-office accounting. The tool can match to the terms found in fund documentation—from basic to complex—and manages specific fund terms, parameters, side letter considerations, and other factors to effectively calculate management fees and carried interest including hypothetical and realized calculations.
Efficiently managing technology is key to all of our work with asset managers—more investors and capital means more data. We’re providing data management solutions and platforms to ensure “golden sources” of data that can be used for investment strategies and to simplify multi-jurisdiction reporting.