Analysis
Structured Fund Vehicles: Navigating Operational Issues in Rated Note Feeders and Collateralized Fund Obligations (CFOs)
As private markets expand, CFOs and COOs face mounting complexity in structuring Rated Note Feeders and Collateralized Fund Obligations (CFOs)−requiring precise administration to safeguard transparency, control, and investor confidence.
CFOs and COOs in private markets face a growing challenge: meeting investor demand for access and yield while safeguarding operational resilience. Structured vehicles — particularly Collateralized Fund Obligations (CFOs) and Rated Note Feeders — have become powerful tools for broadening distribution and optimizing capital structures.
But with opportunity comes operational and governance complexity. The question is not only whether these vehicles can be launched, but whether they can be run with the rigor investors, auditors, and regulators now expect. The answer often hinges on the choice of the collateral and fund administrator — and whether they can provide the control, transparency, and scalability leadership teams require.
Collateralized Fund Obligations (CFOs)
CFOs transform pools of private market fund interests into multi-tranche vehicles, offering investors differentiated risk-return options. For CFOs and COOs, they bring both opportunity and exposure.
| Operational Issue | How the Right Fund Administrator Solves It |
| Complex Waterfalls | Errors in multi-tranche allocations can result in misstatements that damage investor trust. Administrators with automated waterfall engines provide accuracy, control, and audit-ready assurance. |
| Complex Waterfalls SPV and Jurisdiction Complexity | Managing multiple SPVs across borders strains finance teams. Experienced administrators centralize multi-jurisdiction activity into coherent reporting, reducing risk and inefficiency. |
| Transparency Pressure | Investors demand real-time tranche-level performance. Without it, credibility suffers. Leading partners deliver dashboards and tailored reporting that reinforce confidence. |
| Liquidity Interdependencies | Stress in one tranche can ripple across the structure. The best administrators use stress-testing and liquidity modeling to give executives foresight into risks. |
| Regulatory and Audit Scrutiny | Errors invite prolonged audits or regulatory intervention. Administrators with robust compliance frameworks help CFOs and COOs demonstrate institutional-grade governance |
Rated Note Feeders
Rated Note Feeders offer a scalable way to open private market strategies to yield-seeking institutions such as insurers. But they bring challenges that land squarely on the desks of CFOs and COOs.
| Pitfall | How the Right Fund Administrator Solves It |
| Cash Flow Matching | Liquidity gaps between fund distributions and feeder obligations can create reputational risk. Administrators with real-time reconciliation systems prevent mismatches and protect investor confidence. |
| Interest Rate and FX Risk | Manual oversight of accruals and currency flows risks financial misstatements. Strong partners automate interest and FX processes, delivering control and accuracy. |
| Investor Reporting | Yield-focused investors and ratings agencies demand consistency. Administrators provide timely, investor-grade reports, ensuring alignment with external expectations. |
| Regulatory Complexity | Cross-border feeders invite compliance scrutiny. Administrators with multi-jurisdictional expertise help executives demonstrate governance and avoid regulatory missteps. |
| Operational Bottlenecks | Manual reconciliations and covenant monitoring tie up finance teams. The right partner uses automation and scale to streamline operations and free resources. |
Alter Domus: Our structured vehicle expertise
For finance and operations leaders, the choice of fund administrator is ultimately about control, credibility, and scalability. The strongest partners bring depth of expertise in structured vehicles like CFOs and rated feeders, combined with breadth across the wider private markets ecosystem — commingled funds, co-invests, SMAs, and SPVs. This breadth matters: it allows CFOs and COOs to consolidate providers, reduce operational fragmentation, and ensure consistent governance across all fund types.
The right administrator also provides confidence that every process — from cash allocation to reporting — can withstand investor, auditor, and regulatory scrutiny. They invest in technology to minimize manual intervention, deliver transparency that strengthens investor relationships, and act as proactive partners in anticipating risks before they materialize.
CFOs and COOs today are not simply managing back-office operations; they are responsible for safeguarding investor trust and enabling their firms to scale. Structured vehicles such as CFOs and Rated Note Feeders magnify both the opportunity and the operational risks of private markets.
Analysis
Why COOs and CFOs of Wealth Managers, Multi-Family Offices, and OCIOs Should Consider Outsourced Fund Administration
Rising operational complexity, lean teams, and expanding investment mandates are driving wealth managers and family offices to consider outsourced fund administration.
Why consider outsourced fund administration
As a COO or CFO of a wealth manager, multi-family office, or OCIO, you carry a responsibility that extends well beyond numbers. You’re not just managing books—you’re safeguarding a family’s legacy, ensuring operational resilience, and giving principals the confidence that their capital is stewarded with precision. That mandate has only grown more complex.
Expanding into direct deals, private credit, real estate, and cross-border structures means you’re expected to deliver institutional-grade reporting, governance, and controls—often with lean teams and finite resources. It’s a balancing act: meeting rising operational demands while protecting the office’s agility and focus. This is exactly where an outsourced fund administration model becomes invaluable.
Why outsourced fund administration fits the wealth manager, multi-family, and OCIO office model
Outsourcing isn’t about relinquishing control—it’s about fortifying your operational backbone so that you can focus on higher-value work. A trusted fund administrator brings:
- Accuracy and independence – Third-party validation of NAVs, cash flows, and performance ensures credibility with stakeholders.
- Scalability – As the family invests in new strategies or regions, outsourced infrastructure flexes with you.
- Technology advantage – Purpose-built platforms for data management, accounting, reporting, and investor visibility—without the heavy lift of implementation or maintenance.
- Efficiency – Offloading data feeds, document management, reconciliations, financial preparation, audit management, and compliance tasks frees your time for strategic planning and governance.
- Credibility – Enhances your standing with advisory clients, auditors, partners, and institutional co-investors by demonstrating best-practice operations.
What sets Alter Domus apart as an outsourced or co-sourced solution
For COOs and CFOs of wealth managers and multi-family offices, partnering with Alter Domus means strengthening your operational backbone without losing control. Our model is built to meet the rising demands of complex investment offices while safeguarding the agility and stewardship your principals expect.
- Knowledgeable staff – Our teams bring deep experience in IBOR and ABOR reporting, as well as NAV calculation, cash flow management, and investor reporting. Whether working within our licensed systems or those licensed by your firm, we ensure that operations run smoothly and in full compliance.
- Service level agreements: We commit to aggressive SLAs that ensure timely, accurate posting of data across portfolios, enabling you to meet reporting deadlines with confidence. That reliability frees your office to focus on value-add initiatives like strategic allocations, family governance, or new market entry.
- Thought leadership: We don’t just administer funds; we help shape back-office strategy. Our specialists assess your operational set-up and advise on process redesign, technology choices, and efficiency measures – helping you protect long-term advisory fees and build resilience as your family office grows in complexity.
- Built for alternatives: Alter Domus was created to serve private capital. From private equity and venture to private debt, infrastructure, and real estate, we understand the nuances of alternative assets and how to integrate them into family portfolios. That expertise ensures your reporting, governance, and investor communications reflect institutional-grade standards.
- Global scale with local relevance: With more than 6,000 professionals across 23+ jurisdictions, Alter Domus delivers the reach and regulatory expertise of a global leader. Crucially, we know how to apply that scale to the needs of smaller wealth managers and multi-family offices—bringing institutional-grade processes, controls, and insights to leaner teams without overburdening them.
- Technology advantage: Our purpose-built platforms reduce manual processing, harmonize data feeds, and deliver investor-ready reporting. For offices running lean teams, this alleviates the burden of system implementation and ongoing maintenance, while ensuring transparency and auditability.
- Operational assurance: From capital calls and waterfall allocations to audit coordination and compliance checks, we provide institutional-grade rigor. That strengthens your credibility with auditors, trustees, and co-investors—key for offices balancing family dynamics with professional governance.
- Flexible engagement models: Whether you want a traditional outsourced solution, a co-sourced arrangement where you retain data ownership, or even a lift-out of existing in-house teams, Alter Domus tailors its approach to preserve continuity while enabling scale.
What this means for COOs and CFOs
As a COO or CFO, you sit at the heart of your company’s success. You’re tasked with ensuring both operational excellence and strategic foresight. We see what your peers are doing and understand which processes work.
In today’s complex landscape, outsourcing fund administration services is not about giving up responsibility—it’s about giving yourself the tools, expertise, and confidence to meet the family’s needs today and for generations to come.
Analysis
CFO Structures Explained: Bringing Transparency to a Complex Capital-Raising Tool
Learn how Collateralized Fund Obligations (CFOs) provide NAV liquidity and capital efficiency in private markets, and how Alter Domus enables execution.
Collateralized Fund Obligations (CFOs) have re-emerged as sophisticated capital-raising instruments at the intersection of private markets and structured finance. This resurgence reflects both private market managers’ search for liquidity solutions and institutional investors’ appetite for rated exposure to alternative assets.
CFOs serve as critical bridges between private equity fund managers seeking flexible capital and institutional investors requiring rated securities. As traditional financing avenues face pressure from sustained elevated interest rates, these structures have evolved from niche instruments to mainstream financing tools for sophisticated asset managers.
What are CFOs?
Collateralized Fund Obligations represent securitized portfolios of private fund interests, typically packaged into special purpose vehicles (SPVs) that issue tranched debt and equity securities. At their core, CFOs transform relatively illiquid limited partnership interests into structured products with varying risk-return profiles.
The fundamental architecture involves:
- Asset Pool: A diversified collection of fund interests spanning private equity, private debt, or other alternative assets.
- Tranched Capital Structure: Typically featuring senior notes (AAA/AA/A), mezzanine tranches (BBB/BB), and equity components.
- Cash Flow Waterfall: Predetermined distribution hierarchy prioritizing senior tranches.
- Rating Agency Oversight: Independent risk assessment from agencies like KBRA, Moody’s, and S&P.
The tranched structure creates investment options suitable for different risk appetites. Investment-grade senior notes appeal to insurance companies and pension funds, while subordinated tranches attract yield-focused investors comfortable with higher risk.
The equity piece typically remains with the sponsor or dedicated alternative investors seeking enhanced returns.
Why Sponsors Use CFOs to Unlock Capital
For private market managers, CFO structures provide multiple strategic advantages in today’s capital-constrained environment. One of the most significant benefits lies in their NAV financing capabilities.
According to Preqin’s Global Private Equity Report, private equity assets under management are projected to double from $5.8 trillion at the end of 2023 to approximately $12 trillion by 2029, reflecting sustained institutional confidence in alternative investments despite moderating growth rates.
Another advantage is capital recycling efficiency. By securitizing mature fund positions, managers can accelerate the return of capital to limited partners while still preserving potential upside.
CFO structures also expand investor access. By transforming alternative investments into rated securities, they make these products accessible to a wider base of regulated institutional investors.
Key Mechanics: How CFO Structures Work
Executing these mechanisms efficiently often requires fund administration services and fund regulatory reporting services to manage accounting, compliance, and investor reporting across underlying fund interests.
Similarly, tailored private equity fund solutions and private debt fund solutions help optimize structuring, NAV management, and investor communications.
- SPV Structure: The securitization process begins with establishing a special purpose vehicle that acquires the fund interests. This legal separation creates bankruptcy remoteness and enables the issuance of rated securities backed by the underlying portfolio.
- Tranching Process: The capital structure typically includes:
- Senior Secured Notes (60-75% of capital structure)
- Mezzanine Notes (10-20% of capital structure)
- Subordinated Notes/Equity (15-25% of capital structure)
- Waterfall Distributions: Cash flows cascade down the tranches in a predetermined order, with senior noteholders getting principal and interest first. This is what gives senior securities investment-grade ratings.
- Coverage Tests: Ongoing monitoring includes overcollateralization and interest coverage tests. These mathematical fences protect senior investors by siphoning off cash from junior tranches if the portfolio’s performance falls below certain thresholds.
- Reinvestment Period: Most structures have a 2-4 year reinvestment period during which the manager can recycle capital from realizations into new fund commitments, subject to eligibility criteria and portfolio constraints.
- Liquidity Facilities: To manage timing mismatches between fund cash flows and payment obligations, CFOs often include revolving credit facilities that provide short-term liquidity between distribution periods.
Challenges: Transparency, Ratings, and Reporting
Despite the benefits, CFOs present operational complexities that require special expertise to navigate.
Private markets are opaque. Private fund interests have irregular valuation periods, non-standard performance metrics, and limited secondary market price discovery. This opacity is a challenge for rating agencies, which have to assess credit quality with less frequent and standardized data than in traditional structured finance.
Disclosure restrictions add to the challenge. Limited partnership agreements often have confidentiality clauses that restrict position-level disclosure. Structuring teams have to create information frameworks that meet rating agency requirements while respecting contractual constraints.
Regulatory frameworks add another layer of complexity, with transatlantic divergence creating particular challenges for global managers. EU regulations (Securitisation Regulation and AIFMD) have different risk retention and disclosure requirements than US frameworks (Regulation AB and Dodd-Frank).
Unlike corporate bonds or mortgages, private equity distributions follow non-linear patterns driven by exit timing, recapitalisation, and manager discretion. Modelling these cash flows requires advanced forecasting capabilities that combine quantitative analysis with qualitative judgement.
How Alter Domus Delivers CFO Success
The operational infrastructure required to support the CFO goes beyond traditional fund administration. As CFOs have become more complex, savvy managers recognize that execution excellence requires a partner with private markets knowledge and structured finance expertise.
Alter Domus has become a market leader in this space, having closed over 35 CFOs across North America and Europe. This track record reflects the firm’s integrated approach to managing these complex instruments throughout their lifecycle.
At the foundation is a fund-of-funds accounting expertise. Unlike traditional funds, CFOs require multi-layered accounting frameworks that track cash flows from underlying investments through the SPV and ultimately to security holders. This means specialized systems that can handle the accounting nuances at each level—from recognizing distributions and valuing fund positions to calculating payment obligations across the tranched securities.
The waterfall calculation engine is perhaps the most critical component. These algorithms manage the priority of payments with institutional-grade precision, so cash is distributed exactly as per indenture. The complexity of these waterfalls increases exponentially when you add features like PIK (payment-in-kind) interest, coverage test remediation and reinvestment criteria.
We offer fund administration services, fund regulatory reporting services, and specialized private equity and private debt fund solutions, ensuring that complex NAV calculations, cash flow waterfalls, and reporting obligations are managed accurately and efficiently.
If you’re considering a CFO structure, this operational foundation doesn’t just support execution—it gives you an edge. By outsourcing the complexity to a partner with private markets knowledge and structured finance expertise, you can focus on portfolio and investor relationships.
Conclusion
Collateralized fund obligations are powerful but complicated capital-raising tools for private market managers. When done right, they create win-win outcomes for sponsors looking for flexible liquidity, investors looking for rated exposure to alternatives, and limited partners looking for accelerated recycling.
The market is accelerating, with innovation in underlying assets, structure, and investor engagement models. CFOs will become more common in alternative investments as private market NAV keeps going up through 2025 and beyond.
But they are complicated. The operational intricacies of fund securitization require partners with in-depth experience in private markets, structured finance, and regulatory frameworks. With the right guidance, these instruments can go from complicated to a strategic advantage for sophisticated players.
Disclaimer: THIS MATERIAL IS PROVIDED FOR GENERAL INFORMATION ONLY, DOES NOT CONSTITUTE INVESTMENT ADVICE, AND PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.
Analysis
Tech’s Impact on Fund Admin Services
Explore how tech is reshaping fund administration through automation, APIs, and smart ops. Discover what GPs and COOs should prioritize in 2025.
The investment landscape has shifted dramatically, with fund administrators facing rising investor expectations, regulatory complexity, and market volatility. Traditional approaches no longer suffice.
Investors now demand greater transparency, faster reporting, stronger security, and lower fees—making technology the key differentiator between administrators that thrive and those that fall behind.
Most wealth managers already rely on digital platforms—94% of firms with $500M+ in assets and 61% of smaller firms use fintech to improve client engagement and efficiency.1 The question is no longer whether to adopt new technology, but how quickly and effectively it can be deployed to transform operations.
How Technology Is Transforming Fund Administration
From spreadsheets to smart systems
The journey from manual processes to intelligent automation represents perhaps the most significant shift in fund administration technology. Historically, fund administrators relied heavily on spreadsheets and manual data entry—approaches that were not only time-consuming but prone to human error.
Modern fund administration technology has evolved to replace these outdated methods with integrated systems that automate routine tasks. Advanced platforms now handle everything from NAV calculations to investor communications with minimal human intervention. This transition eliminates the bottlenecks associated with manual processing while dramatically reducing error rates and improving overall efficiency.
Digitization of workflows and document handling
Document management has traditionally been one of the most labor-intensive aspects of fund administration. The digitization of workflows and document handling represents a quantum leap forward, enabling administrators to process, store, and retrieve critical information with unprecedented speed and accuracy.
The benefits extend beyond mere efficiency. Digital workflows create audit trails that enhance compliance and security while reducing the risk of document loss or unauthorized access. For fund managers and investors alike, this translates to greater confidence in the integrity of administrative processes.
Role of APIs in real-time data sharing
Application Programming Interfaces (APIs) have revolutionized how fund administration systems interact with each other and with external platforms. By enabling seamless data exchange between previously siloed systems, APIs create a connected ecosystem that supports real-time information sharing and processing.
This connectivity allows fund administrators to integrate with banking platforms, trading systems, and investor portals, creating a unified experience for all stakeholders. Rather than waiting for batch processing or manual reconciliations, information flows continuously between systems, enabling near-instantaneous updates and reporting.
Benefits for GPs and Operations Teams
The power of RNFs becomes clear when comparing SCR requirements. Consider two scenarios:
Faster, more accurate investor reporting
Perhaps the most tangible benefit of fund administration technology is the transformation of investor reporting. Traditional reporting cycles often stretched over weeks, with manual data collection and verification creating significant delays. Today’s technology-enabled administrators can compress these timelines dramatically, delivering accurate reports in days or even hours. 81% of clients using fintech platforms in 2025 report higher satisfaction from greater transparency and easier access to investment data.1
This acceleration doesn’t come at the expense of quality. In fact, automated data processing and validation actually enhance accuracy by eliminating human errors and ensuring consistent application of accounting principles. Whether you’re a venture capital fund administration or managing traditional vehicles, digital tools compress reporting cycles from weeks to hours.
Improved scalability for fund growth
Traditional fund administration models faced inherent limitations when it came to scaling operations. Adding new funds or investors typically requires proportional increases in staffing and resources, creating operational challenges and cost pressures during periods of growth.
Modern fund administration technology breaks this linear relationship between growth and resource requirements. Cloud-based fund administration services can scale elastically as you grow—from managing a single fund in-house to migrating fund admin activities to a third-party platform. This enables administrators to support fund managers through growth phases without service disruptions or quality compromises.
Better risk management and compliance readiness
The regulatory landscape for investment funds continues to grow more complex, with new requirements emerging across jurisdictions. Fund administration technology has evolved to address this challenge through automated compliance monitoring and regulatory reporting capabilities.
Advanced systems now use regulatory rules engines to continuously monitor transactions and positions, flagging potential compliance issues early for proactive remediation. This reduces risk and workload for operations teams, replacing manual tracking and sampling with automated, comprehensive monitoring.
Comparing Traditional vs. Tech-Enabled Models
Manual bottlenecks vs. automated efficiency
The contrast between traditional and technology-enabled fund administration is clearest in operational bottlenecks. In conventional models, tasks like month-end reconciliations, NAV calculations, and investor distributions often create backlogs demanding all-hands-on-deck efforts.
Tech-enabled administrators remove these bottlenecks through automation. Reconciliations that once took days now finish in hours or minutes, with only exceptions flagged for review. NAV runs on set schedules with little manual input, and distributions flow through straight-through processes.
This shift goes beyond speed—it reshapes fund administration. Instead of routine data processing, teams now focus on exception handling, client relationships, and value-added analysis.
Fragmented systems vs. integrated platforms
Traditional fund administration relied on separate systems for accounting, investor services, compliance, and reporting, leading to integration issues, data inconsistencies, and poor user experiences.
Modern platforms take an integrated approach, spanning all functions to ensure data consistency, streamline workflows, and deliver a cohesive experience. With all data stored in a single ecosystem, administrators can produce comprehensive reports and analytics without the transformation challenges of fragmented systems.
What to Look for in a Technology-Forward Partner
Infrastructure maturity, flexibility, and security
When selecting a fund administrator, prioritize technology infrastructure. Leading partners invest in enterprise-grade platforms that combine reliability, flexibility, and strong security.
Mature infrastructure ensures uptime, processing power, disaster recovery, and robust change management to prevent disruptions. Flexible platforms support diverse fund types, complex structures, and a wide range of asset classes, including alternatives.
Security is critical amid rising cyber threats. Top administrators deploy encryption, multi-factor authentication, access controls, and continuous monitoring, while maintaining SOC 2 and ISO 27001 compliance.
Ability to scale with complex fund structures
As investment strategies grow more sophisticated, fund structures have become increasingly complex. When considering In-house vs third-party fund administration, look for providers whose platforms already support complex structures like master-feeder and venture capital fund administration.
These systems also scale to diverse investor needs, managing varied fee arrangements, tax treatments, reporting requirements, and side letters, ensuring all investor-specific provisions are accurately implemented and documented.
Conclusion
The technological revolution in fund administration represents both a challenge and an opportunity for investment managers. Those who partner with technology-forward administrators gain significant advantages in operational efficiency, investor satisfaction, and regulatory compliance.
As we look toward the future, tech like AI and machine learning will continue to enhance automation capabilities, while blockchain[1] and distributed ledger technologies may fundamentally transform transaction processing and verification. Data analytics will grow more sophisticated, providing deeper insights into portfolio performance and investor behavior.
For fund managers navigating this evolving landscape, the choice of a fund administration service provider has never been more consequential. By selecting providers with robust, flexible technology platforms and demonstrated commitment to innovation, they can ensure that their administrative capabilities remain aligned with their strategic ambitions—today and into the future.
Disclaimer: THIS MATERIAL IS PROVIDED FOR GENERAL INFORMATION ONLY, DOES NOT CONSTITUTE INVESTMENT ADVICE, AND PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.
Conference
FAROS Depositaries and Investment Management Company Summit 2025
Dirk Sanden will be attending the FAROS Depositaries and Investment Management Company Summit on February 20th in Frankfurt. This premier gathering brings together decision-makers, industry experts, and thought leaders from across German depositaries and fund administration.
In an ever-evolving regulatory landscape, this event offers a valuable opportunity to connect with market experts and explore the latest trends, challenges, and opportunities in fund administration and services. If you’re attending, be sure to connect with Dirk in person!
Dirk Sanden
Luxembourg
Director, Sales & Relationship Management
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Analysis
Acing loan agency: What to look for in an administrative loan agent
As private debt managers’ operations grow in complexity, outsourcing more of the administration burden to a loan agent offers the opportunity to streamline middle office duties.
Private debt has encountered explosive growth as an asset class in recent years. The industry started out 2024 with $1.5 trillion in assets under management, up from $1 trillion in 2022, according to Morgan Stanley.
As direct lenders and broadly syndicated loan managers seek to grow their funds and returns alongside this industry growth and investor demand, the burden of their fund operations can begin to have an effect on their success.
This is especially the case with loan agency operations, known for their intense level of work across complex credit investments at high quantities.
Under these industry conditions, using a loan agent becomes much more appealing for many managers, and firms who already depend on a third-party loan agent may look to increase their outsourcing or select a new provider that more closely meets their needs.
To understand more about loan agency and how a good loan agent operates, read on.
What is a loan agent?
In the credit and private debt space, a loan agent is the party that facilitates all ongoing operations required to adhere to the loan terms and liaises between the lenders and counterparties to do so. Tasks that are central to loan agency include:
- Calculating a loan’s interest over time
- Coordinating loan and interest payments between multiple lenders and counterparties
- Sending loan communications between lenders and counterparties
- Engaging outside parties like lawyers or fund administrators to move along loan operations
There are a few different kinds of loan agents depending on a lender’s needs or depending on the nature of the loan:
Administrative agent
A lead administrative agent, or a named agent, fully represents the lender on the loan and is named in documents as the administrative agent. By taking this lead administrative agent role, the partner takes over all loan agent responsibilities from the lender.
Sub agent
The sub agent role exists for lenders who want to take the lead role in the loan agency process and be listed as the lead agent on their own deals. For the behind-the-scenes responsibilities that they hope to outsource, they would work with a sub agent who is not named on the loan but handles elements such as payment distribution and managing interest rates.
Successor agent
A successor agent steps in when the administrative agent resigns or is replaced, a situation that frequently arises in restructuring scenarios and liability management exercises (LMEs). This change can disrupt the smooth administration of a credit facility and potentially delay the LME or restructuring process. Acting as a neutral third party, the successor agent ensures a seamless transition, aligning the goals of all involved parties and facilitating a the swift progression of the constituents’ objectives and desired outcomes. At Alter Domus, we’ve served as successor agent on many high-profile LME and restructuring deals such as Amsurg, Apex Tool, Boardriders, Brightspeed, Revlon, Trinseo, and Wheel Pros, among many others.
What to look for in a loan agent
While lenders can insource loan agency responsibilities, many choose to outsource some or all of this imperative, labor-intensive fund operation. By outsourcing these responsibilities to a loan agent, lenders benefit from tighter headcount in their operational teams and the close attention and expertise of teams specifically focused on all aspects of the loan agency process.
But not all loan agents are created equal. Loan agency involves painstaking and bespoke work to carry out the terms of a loan over the multiple years of its life. When evaluating partners to serve as a loan agent, here are some key elements to help decide if they’re up for the task:
- A balance of bespoke expertise and ability to scale operations
As the direct lending and BSL spaces grow and managers hone their strategies along with that growth, more complex loan terms and transactions emerge. It’s encouraging to see our industry mature in this way, but it does make for more complex fund operations, particularly on the loan agency side.
For a loan agent to work effectively, they need to have direct and deep expertise in these bespoke strategies and debt vehicles. At Alter Domus, we pride ourselves in operating at the intersection of bespoke expertise and high volume. Our servicing teams are segmented out by asset class expertise and work cohesively for an end-to-end approach, as opposed to the siloed operations of our competitors. We have the experience and the team size to achieve the balance needed for fickle loan agency challenges.
- Technology-enabled service
Loan agency services may take plenty of time, attention, and expertise from your provider, but it’s also crucial that your provider has capable technology underpinning their loan agent duties. When a provider relies too much on manual processes in administering loan agency, their lender client absorbs the high risk of error.
At Alter Domus our loan agency teams rely on our proprietary software platform Agency360 to service our direct lender and BSL clients. There are key benefits to relying on a proprietary tool for these needs. These loan services benefit from key advantages of using a proprietary tool – for example, we control the updates and maintenance of the tool ourselves rather than relying on software from a third party. We also avoid having to pass along rising fees from a third-party platform.
A reliance on powerful technology should also extend to the client experience. When outsourcing loan agency operations, lenders should still have a view into the service they’re receiving and a 24/7 ability to access their loan data and reporting. A third-party loan agent should offer a tech-enabled and convenient way to check in on their operations and download relevant reporting.
At Alter Domus, we offer Agency CorPro as a home base for our clients. The proprietary portal platform serves as our purpose-built solution to exchange sensitive asset information and important loan documentation between our teams. That means our work is available to you at all times in a self-service fashion.
- Breadth of loan agency and other middle and back-office service capabilities
An ideal loan agent should offer additional services throughout the loan lifecycle to support your operations. By placing multiple outsourced needs with the same firm, your teams can benefit from a more holistic data and technology experience.
At Alter Domus, we’re experts in private debt and BSL, and cover the full range of credit middle office services for these asset classes, from loan servicing to fund administration to borrowing base administration. We know that every operational model is different at each firm, and we are able to customize our services and delivery model to any setup your firm prefers, including outsourcing, co-sourcing and managed service models.
Optimize your loan agency operations with Alter Domus Agency Services
As a top provider in the market, Alter Domus’ Agency Services offering meets all these needs and more. Our servicing teams are trained specifically in bespoke credit vehicles and are large and experienced enough to handle high volumes of loans. In fact, our peak seasons see us processing more than 100,000 payments in a single day.
Ready to see what Alter Domus can do for your loan agency needs and beyond? Learn more about Alter Domus’ Agency Services here. To speak with our Agency Services team about how our services can help your middle- and back-office operations, contact us here.
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Insight
Navigating retailization’s back-office challenges
Chief Operating Officer, Mike Janiszewski spoke to PEI Fund Services report about the value of outsourcing administrative functions to respond to the increased market demand from individual investors. Get in touch to partner with a proven third-party provider to harness this potential.
Mike Janiszewski
Chief Operating Officer
June 4, 2024
Mike Janiszewski, Chief Operating Officer, spoke to PEI Fund Services report about the value of outsourcing administrative functions to respond to the increased market demand from individual investors. With about half of global assets under management (AUM) held by individuals, private fund managers are keen to tap into this vast potential. Large asset managers, like Blackstone, have ambitious goals for increasing their retail capital offer. However, accommodating individual investors in alternatives, presents significant complexity- complicated structures, dealing with varying regulations, individual tax burdens and increasing back-office administration.
Mike opined that “Taking on investment from private wealth investors will require a step-change in middle- and back-office infrastructure” Private markets have responded to this already and multiple investment structures are being adopted to accommodate the differing needs of individual investors, as well as new distribution channels and digital platforms. At AD, we have been specializing in this for the past 20 years; delivering for our clients via a combination of jurisdictional, technological and administrative expertise.
Ultimately, leveraging technology for automation and data streamlining must come alongside partnership with third-party providers who can harness new tools for great success. Reach out to to find out more.