This article was originally posted in Asset Servicing Times

Daniel Trentacosta, Global Head of Private Markets & Change for MUFG Investor Services, discusses significant industry impacts including outsourcing, private markets and what the next few years may hold.

Given that private equity fund administrators experienced a transformative year marked by a heightened focus on data collection and analysis in 2023, how are you leveraging technology and automation to stay competitive, and what are the biggest tech-related challenges you are facing in 2025?

Daniel Trentacosta: For us, it’s about partnering with managers and custom-fitting technology and services to best support clients’ unique needs. Leveraging the right technology and employing automation are non-negotiables. We are constantly examining data strategies and exploring client-facing technology and new marketplace tools to strengthen the client experience and improve scale on our side.

Given the ongoing democratization of alternatives, traditional funds are evolving into more complex structures with a range of investor demands. Evergreen structures are a topical example. While these funds offer unique investor benefits, they present operational challenges. These structures may require performance and management fee calculations for investors at different rates, in addition to various waterfall and carried interest approaches. Our technology is already built to support open-ended and closed-ended funds, and our team tailors these systems to meet the specific needs of evergreens. We know that automation is key and custom-fitting services without manual intervention reduces the margin for error and mitigates risk.

With climbing demand for outsourcing continuing to shape the industry, what factors should fund managers consider when deciding between in-house administration versus outsourcing, and how has this decision-making process evolved?

Trentacosta: The decision to outsource starts with a conversation. Working with a trusted administrator, managers need to consider their current pain points and realistically identify what is possible to address challenges. We know that outsourcing involves entrusting certain administrative functions to an external partner and that is why ensuring the best culture fit from a business perspective is important.

When faced with increasing costs, fragmented processes, and outdated systems, managers often look at outsourcing as more than an efficiency play. Our teams have deep experience partnering with managers to navigate these decisions, which center around core questions including: how complex are the tasks at hand and what technology is needed, and, importantly, how disruptive would this be to running my business?

We’re seeing that managers are frustrated with issues like poor service quality, high turnover, outdated technology, and unjustified price increases. How are you differentiating your service offering and what innovations are you implementing to exceed client expectations?

Trentacosta: MUFG Investor Services undertakes a client-centric approach based on constant communication and partnership. Across the board, our teams listen to client feedback and tailor fit solutions and customize technology around these unique needs. Communication is critical, and part of this approach is addressing concerns head on.

From the start, clients are supported by a global network of experts with decades of industry experience to help ensure a seamless experience. Our one-stop-shop approach provides support across the investment value chain, helping to streamline services and increase efficiency.

Looking ahead, with data challenges including maintaining data accuracy and security, and ensuring accessibility and regulatory compliance, plus platform integration being critical due to the advent of different applications, how are you future-proofing your operations and what trends do you see shaping fund administration in the next three to five years?

Trentacosta: You don’t need a crystal ball to see that the future includes new complex structures, investor classes, and advances in technology. Core elements such as the need to maintain data integrity and security, in addition to keeping your finger on the pulse of change, will remain. For us, it comes back to doing what we do best: communicating with clients, anticipating their future needs, and continually improving our processes and technology to exceed those needs.