When to migrate a private equity fund and how to do it

The operating context for the private equity manager has completely transformed during the last decade and many firms are preparing to migrate their funds as a result.

Buyout firms are now managing US$4.7 trillion of assets and holding almost twice as many portfolio companies in their funds than in 2019, according to Bain & Company figures.

With the buyout industry operating on a completely different scale than 10 years, the demands on the buyout back office have inevitably intensified. This not just because GPs are now responsible for shepherding a larger number of funds, shepherding bigger portfolios, and executing a higher volume of deals. Managers also have to comply with higher investor and advisor demands when it comes to the granularity and timeliness reporting.

The evolution of deal structures, which now include co-investments and continuation vehicle transactions, have placed further workloads on private equity operations, as have the increasing use of fund finance and the growth of the non-institutional investor base.

Time for a change: when to migrate funds

The increasing complexity and sophistication of the private equity business means that buyout managers are now facing an operational inflection point, where the relatively simple operating infrastructure that has served the industry so well for so long now requires an upgrade.

Similarly, long-standing outsourcing partnerships, where outsourcers were only required to provide quarterly fund reports, could now also require a refresh.

It is in this context that a series of trigger points are emerging for buyout managers to take the leap and migrate funds. This is not a decision to be taken lightly – fund migrations are complex, demanding projects that can be at risk of costing more and taking longer than anticipated – but many private firms are now approaching a point where delaying a migration can’t be put off any longer.

Why managers migrate funds

• Poor service: As the demands on outsourcing partnerships have increased, there are more reports of private equity firms citing poor service delivery as a catalyst for migration. Fund administrators still running on legacy systems, using inflexible reporting templates and relying on manual processes have been unable to keep up with the reporting timelines and detail that private equity firms and their investors now expect. This in turn can lead to errors and delays. Managers will expedite migrations when incumbents can’t keep pace with evolving GP requirements, switching to administrators that have the tools and scale to stay ahead of increasing regulatory and reporting workloads.
• Provision of scale: Deteriorating service levels can often be boiled down to a question of scale. Private equity managers have seen huge increases in assets under management (AUM) and in many cases simply outgrow the capacity of incumbent providers and have to move on to providers that have the bandwidth to grow with a manager over time and handle rising transaction volumes and a wider array of fund structures.
• Keeping costs down: Private equity managers are facing the most challenging fundraising market since the 2008 financial crisis, with private equity fundraising down 17% year-on-year in H1 2025, according to PEI figures. It has been essential, then, for private equity firms to run fund operations as efficiently and cost-effectively as possible and delivering value for money for LPs. Indeed, a Preqin survey found that well over a quarter of managers (29%) see pricing and fee transparency as a key catalyst for changing fund administration provider.
• Up-tiering technology: The requirement to upgrade technology stacks and transition onto best-of-breed industry software packages will be a driver of fund migration for private equity managers, who are increasingly relying on fund administration partners to not only act as a provider of outsourced fund reporting services, but also a first point of contact for advice on the choice and implementation of technology. Preqin’s survey found that close to a fifth of managers change fund administrator because of technology.

How to choose a new fund administrator

The reasons that trigger a fund migration will also shape what a private equity manager wants from a new fund administration provider.

The ask will vary from manager to manager, depending on investor base, current gaps in in back-office operations, technology requirements and geographic footprint.

There are nevertheless a set of core themes that will inform fund administration selection in most cases:

• Asset class expertise: Experience and track record in private equity matter. GPs will expect their fund administrator to have deep private equity expertise. Geographic reach is also important. GPs want fund administrators to be close to the specific LP communication, reporting and fund structure preferences in all key global markets, and to have teams on the ground where investors are active.
• Exceptional technology and data capability: Technology is viewed as the single most valuable lever for making private equity back-offices more efficient and for meeting increasing investor demands. The sophisticated investors will have a firm working knowledge of the asset-specific software programs, including Allvue, eFront, Private Capital Suite (formerly Investran) and Yardi, and able to advise on the technology stacks suited to each client’s bespoke requirements. Managers also expect fund administrators to facilitate seamless integration and interoperability between the private equity firm’s core back-office infrastructure and third-party data providers. Fund administrators should also be able to implement cloud-native operating models, have an eye on the developments around self-service data for clients, and meet the highest cyber security standards and certifications.
• Operational model flexibility: A change of fund administrator also opens an opportunity for private equity GPs to review operating models, and to transition to an operating model that best serves long-term growth ambitions and technical requirements. GPs will favor fund administrators that can provide operational flexibility, whether that be through a classic outsourcing arrangement, a co-sourcing model or a lift out.
• Comprehensive regulatory knowledge: Keeping track of myriad regulatory developments across multiple jurisdictions has become increasingly challenging for private equity to sustain without support, especially for US managers operating in Europe and/or the United Kingdom. Managers are relying on fund administrators to be up to date on all key regulatory developments, range from the Alternative Investment Fund Managers Directive II (AIFMD II), Common Reporting Standard (CRS) and Foreign Account Tax Compliance Act (FATCA) to the Sustainable Finance Disclosure Regulation (SFDR), The General Data Protection Regulation (GDPR). Automated regulatory reporting and compliance is also becoming a more common ask, as managers look for ways to lighten the regulatory compliance burden.
• Service excellence: Responsiveness and service excellence are a must for all GPs, who are now drafting detailed service level agreements (SLAs) with trackable key performance indicators (KPIs) around processing times and reporting accuracy. The best administrators will understand each client’s context and proactive when it comes to addressing client requirements.

A long-term partnership

When undertaking a fund migration, a private equity manager will want the relationship with a new fund administrator to be a long-term one. It is not in GP or LP interests to be constantly having to migrate funds.

As a fund administrator operating at scale Alter Domus has the resources and private equity-specific expertise to grow with clients, maintain excellent service levels and keep client platforms updated with the latest technological tools. We employ 6,000 professionals across 23 jurisdictions and administer US$3.5 trillion of assets and 36,000 client structures.

We have the scale, technology and industry knowledge to not only facilitate smooth fund migrations that cover the shifting requirements of the modern private equity manager but also put platforms and relationships in place that last for the long-term.