The landscape of private wealth distribution has undergone a significant transformation over the past few years. Historically, traditional asset managers were the key players in distributing mutual funds that held traditional assets like stocks and bonds within the portfolio. However, the market has since evolved, and private market managers who once focused solely on raising capital for drawdown funds via institutions, family offices and ultra-high net worth individuals are now venturing downstream into the private wealth space, opening new avenues for capital raising.
Understanding the operational intricacies involved in creating and distributing evergreen products with a private wealth distribution strategy is crucial to the fund’s success and manager’s reputation. This blog examines the essential operational factors that managers should consider before launching an evergreen private wealth fund. It also highlights how SS&C’s solutions effectively support these needs, and explores how SS&C differentiates itself in this rapidly evolving market.
The Key Challenge: Managing Evergreen Funds
Financial intermediaries are experiencing a significant rise in demand for alternative investment products. However, this increasing interest brings with it a range of operational complexities. Traditional mutual funds, interval funds and tender offer funds are governed by the Investment Company Act of 1940, which allows them to trade through the NSCC Fund/Serv platform. In contrast, non-‘40 Act evergreen products—such as Business Development Companies (BDCs), Real Estate Investment Trusts (REITs), Operating Companies/Holding Companies (OpCo/HoldCo) and 3c7 funds—generally involve more manual processes, as their back-office operations are not standardized in the same manner as those of funds traded through NSCC Fund/Serv. The lack of uniformity in the processing of these products introduces additional intricacy, requiring customized workflows and manual interventions to manage trades.
Apart from interval funds, evergreen products are sold daily by financial advisors, but there is a set date each month/quarter known as a “trade date/NAV date” where new subscriptions are permitted to flow into the fund. Additionally, an evergreen fund may offer investors the opportunity to repurchase shares once a quarter, subject to limits specified in the fund’s Prospectus or PPM (Private Placement Memorandum). As private market managers expand their offerings beyond historical norms and introduce their products to private wealth clients, their ability to navigate these operational nuances while ensuring regulatory compliance becomes increasingly crucial.
SS&C’s Fund Administration + Transfer Agency Solution
SS&C’s bundled fund administration and transfer agency solution provides a tailored service to help managers looking to launch evergreen private wealth products.
Transfer Agency (TA):
SS&C’s Transfer Agency service is seamlessly integrated with the financial intermediary community, addressing the unique challenges posed by the lack of standardization in back-office operations for alternative investments. Recognizing that each broker-dealer and Registered Investment Advisor (RIA) operates with different systems and processes, we have built custom "pipes" to ensure that data flows consistently across all stages of a fund’s lifecycle. This tailored integration allows for efficient exchange of critical information, from trade confirmations and compliance tracking to NAV calculations and investor reporting. By establishing these custom connections, we help streamline operations, reduce manual intervention and ensure that financial intermediaries can manage evergreen alternative investment products with greater accuracy and ease.
Fund Accounting & Administration (FA&A):
When it comes to fund administration and accounting for private market assets, SS&C offers the most comprehensive platform in the industry. SS&C GlobeOp services over $2.5 trillion in private assets across private equity, private credit, infrastructure and real estate. SS&C offers comprehensive services that cater to the unique needs of both evergreen and private-placement funds, providing robust operational support, compliance, risk management and reporting. This makes SS&C a trusted partner for asset managers seeking efficiency and reliability in managing private markets fund accounting and administration.
Differentiation & Competitive Advantage
SS&C’s competitive advantage lies in our unique ability to bundle two critical services: Transfer Agency and Fund Administration & Accounting. Having Transfer Agency (TA) services and Fund Administration & Accounting unified is essential for ensuring a seamless, efficient process in managing the operations within an evergreen fund. When these services are combined, it enables smoother communication and data flow between the back-office operations, reducing manual errors and delays. This unified approach also reduces the risk of discrepancies between investor records and fund data, ensuring our integrated technology produces consistency and accuracy across the entire investment lifecycle.
SS&C’s deep experience in private markets, along with our integrated technology infrastructure, ensures that clients are well-equipped to handle the operational requirements of this rapidly growing segment of the market.
Conclusion
As private wealth distribution becomes more prevalent with the rise of evergreen alternative investment products, asset managers need partners that can navigate the operational intricacies involved. SS&C’s robust solutions—spanning transfer agency, fund administration, and accounting—are designed to simplify these complexities, ensuring clients can focus on what matters most: delivering value to their investors.
With the right infrastructure, tools, and expertise, asset managers can thrive in the rapidly evolving private wealth market. SS&C stands ready to support them every step of the way. Contact us to learn more.
