What challenges are faced by the alternative investment industry and how is Alter Domus helping its clients?

Generally, the alternatives industry is in robust health with demand for alternative strategies growing globally. According to Preqin, assets under management in alternatives will reach more than $23trn by the end of 2027, up from $14trn at the end of 2021. However, in the short term, there are difficult economic circumstances to be confronted, as inflation and interest rate rises are undoubtedly providing strong headwinds.

More fundamentally, we’ve recognised that our clients’ ability to scale their businesses has been hampered by outdated legacy technology, steep operational costs and tough labour conditions. As trusted partners of the world’s leading alternative investment managers, removing these obstacles to growth is our absolute focus.

Indeed, Alter Domus is in the middle of a transformational digital journey that is changing the scope, scale and impact of the solutions we offer. Where once Alter Domus was just a fund administrator, we have reimagined our business across the whole data and information chain, seamlessly connecting back to front offices through technology – our vertically integrated service offering is entirely unique in today’s market.

What role has technology played in Alter Domus’s ongoing transformation?

Our aim is to empower our clients with tech-driven solutions and tools that give a clear advantage to their investment and risk management decisions, with fully digitalised and integrated workflows, platforms and analytically ready data that hits new levels of accuracy, speed and transparency.

There are three distinct strands to our tech strategy: the acquisition of cutting-edge, data-driven companies; partnering with best-in-class platforms such as eFront and Yardi; and the proprietary development of world-class tech solutions, unmatched across our industry, from CorPro, to VBO or Agency360.

To get an idea of the scale of our tech transition, our ‘Accelerate’ programme, launched in 2020 with a $125m investment over five years, will utilise technology to transform our core activities and create new data assets for our clients across different geographies, funds and product types.

What kind of innovative new services is Alter Domus offering?

Our drive for innovation and customer value is reflected in the establishment of our data and analytics team in the last 18 months. The data and analytics team’s SaaS solutions utilize automation and machine-learning capabilities to reduce or remove issues caused by data acquisition, storage, analytics and distribution across investors’ entire portfolios.

The game changer is that the data and analytics team treats data agnostically; Alter Domus no longer must be the fund administrator for our clients to service aspects or all of their data – almost any kind of documentation needed for private credit, CLO management or by asset owners and asset managers can now be extracted, monitored, analyzed and reported on using our alternative investment services. It’s a brilliant reflection of the rapid, impactful changes occurring across Alter Domus – changes from which our customers will reap benefits.

This article was originally published in The Drawdown’s Fund Administration Special Report.

After a difficult period over the last 12 months, the latest forecasts from Preqin suggest that the private debt market is once again picking up pace and is set to reach global AUM of $2.53trn by 2027.

The supply and demand dynamics in private debt have changed: after several years of borrowers being able to negotiate what could be seen as overly-favorable conditions, the tide is turning towards the lender. Capital is available, but lenders are now able to demand more stringent covenant packages and higher yields.

Paolo dives into what this means for the asset class in terms of risk-return and how can new and how established managers can ensure they take full advantage of the opportunities.

This article was originally published in IPE Magazine.

Teams talk about digital transformation, but many struggle to embrace it. It can be costly, time consuming, and the sheer amount of legacy technology that needs addressing can be overwhelming. Yet digital transformation doesn’t always require a large time or financial investment to start. At Alter Domus, we’ve established a transformation playbook to effectively jumpstart our digital transformation journey, building and revamping systems and applications rapidly, while being methodical- and most critically – customer focused.

A technique employed at Alter Domus is Rapid prototyping – an approach that allows teams to test a product idea quickly and inexpensively with clients to gain early insights into their pain points and how to solution them. There are multiple ways to prototype depending on need and time available – a throwaway prototype made in a couple hours to a full five-day Design Sprint, requiring a team to clear calendars, roll up their sleeves and make decisions together quickly.

Case study: Document tracker to DealFact

As data in the alternatives marketplace compounds and outgrows the spreadsheet, the Data & Analytics team saw an opportunity for a SaaS application that stores and manages all documents specified in a credit agreement between a borrower and lender.

Lenders are required to receive and keep track of important financial information from their borrowers, and that process was typically being performed via email and local spreadsheets, a manual process that required multiple follow ups and chasing, as there was no one place where all the documents were stored, making it very challenging for the lender to determine if they were receiving all the documentation outlined in the credit agreement.

The team started quickly building a prototype leveraging an existing internal tool that allowed users to upload and store all their documents in one place, giving them a clear picture of what’s been submitted and what was missing. We then met with domain experts from other areas within Alter Domus that managed Credit Agreements on behalf of clients to understand that workflow and the requirements needed.

It was crucial that the initial set of requirements reflected only the core functionality, enabling the developers to move with speed while at the same time putting a compelling solution in front of our clients. After two weeks of prototyping, the initial app was previewed to product strategy, members of the sales team, and select prospects to elicit feedback. The key was the development team was given maximum space to build the initial app before fully deciding functionality, and that the process was iterative, enabling the development to continuously move with velocity.

One of the more critical activities during this phase was partnering with the Commercial team to ensure that the prototype told a story that aligned with their view of what the market needs and resonated with prospects. We quickly validated the idea and affirmed the potential market need opportunity at hand, so the team moved to a full Design Sprint to dive deeper into the client needs and build out a more polished interactive prototype to share with existing clients.

Google Ventures notably developed the Design Sprint process to help clients validate their product hypothesis before investing in the actual product build. This approach also condenses the time-consuming efforts of understanding requirements and getting customer feedback on a realistic prototype – commonly a 3-6 month process – into one week.

Here’s an overview: 

At the conclusion of the sprint, customer feedback would dictate if the idea is viable or not. Some teams find out after a sprint that the idea doesn’t have an audience. For us it was clear that our prototype resonated with interviewees, giving us the go-ahead to transition from high fidelity prototype to building an MVP Product.

The requirements and ideas gathered during prototyping became the basis for a product backlog. Following Agile Development methodology, our product, design, and development teams prioritized this backlog and built a validated idea into a shippable product in roughly seven months. DealFact is currently available for clients.

Highlights

• The Quant team built an application that tracked Loan Trade Settlement times, giving the Loan Trade Settlement team and their clients key insights into how to more effectively manage trade settlement.
• In a week, our Quant team built a dashboard that highlighted our financial spreading capabilities.
• The Credit Vision team used a Design Sprint to gain alignment on critical new features and reimagine the user experience for its next generation relaunch (pending Q3 launch).
• Recognizing the need for a centralized portal for our client-facing products, a Design Sprint was held in January for AD Storefront, to broaden our clients’ awareness of all our products and services, and act as the single “front door” for our clients to log into their respective products (pending Q2 launch).

We’re delighted to have been named ‘Best Fund Administrator – Private Debt’ at the Private Equity Wire European Awards 2023 in London. Following on from our win in the same category at the US awards in November 2022, this coveted award is testament to the growing breadth and depth of our expertise in the field around the globe.

The award recognizes the exceptional growth and development of our Private Debt Solutions across Europe, reflecting our team’s ability to provide market-leading support for private debt managers, meeting their operational, data and transparency requirements. We are particularly proud that the award is voted for by our industry peers.

Patrick McCullagh, Juliana Ritchie, Lora Peloquin and Matthew Molton attended the awards ceremony at The Reform Club in London on 8 March to accept the award and to celebrate the achievement with partners from across the industry.

We are delighted to win this prestigious award this year, which reflects the quality of our service offering and our reputation within the private debt market. Alter Domus continues to grow its private debt services globally, providing true end-to-end solutions to our clients.

Juliana Ritchie, Head of Sales & Relationship Management, Debt Capital Markets, Europe

• Share on LinkedIn
• Email this Page
• Share on Facebook