Accounting Solutions for Private Markets

A Booming European Private Market

The European private markets have been experiencing an unprecedented growth trajectory, solidifying the region’s importance in the global investment landscape. In 2023 alone, private equity assets under management in Europe reached approximately €2.2 Trillion and are forecast to double to almost €4.9 Trillion by 2026. Private equity assets remain the largest sub-class, projected to reach €2.1 Trillion by 2026, constituting 43% of the total invested capital.

This rapid growth highlights increased diversification and investor interest across alternative assets, such as infrastructure, private equity and debt, and real assets, driven by the sector’s robust performance following the Global Financial Crisis. Luxembourg has emerged as a key fund domicile, overtaking the UK in hosting Europe-focused funds, underscoring shifts in regional dynamics and investor preferences​.

As fund structures grow more complex and investor demands for granular performance data intensify, holistic accounting platforms are vital to help fund managers stay ahead in a competitive and regulation-heavy environment.

Addressing the Challenges of Investor Allocations

The depth and specialization of the private markets landscape presents fund managers of all asset sizes with challenges that demand robust, easy to navigate and scalable solutions. From intricate investor allocations to rising demands for transparency, private equity firms must navigate cumbersome operational workflows and reporting intricacies.

While portfolio accounting may involve managing a handful of illiquid assets with periodic valuations, the complexity of distribution and waterfall allocations, as well as relationships across fund structures and legal entities, introduce a level of difficulty that traditional legacy tools struggle to address, while the creation of proprietary systems would be prohibitively expensive.

Fund managers need to offer a streamlined approach, integrating with portfolio accounting and general ledger systems, and enhancing accuracy in waterfall calculations, management fees, and investor notice generation, ensuring seamless execution.

Meeting Demand for Transparency

Transparency has become a cornerstone of investor relationships in the private equity space. As more investors enter the market, they seek comprehensive reporting, with detailed look-through analysis, and greater control over deal participation.

Industry initiatives like the Institutional Limited Partner Association (ILPA) standards (members of which include public and corporate pension funds, endowments, foundations, insurance companies, family offices, and sovereign wealth funds) are driving the need for standardized reporting on performance, management fees, capital calls, and drawdowns.

A modern accounting system should enable firms to quickly produce ILPA-compliant reports and custom-branded statements.

Reducing Operational Overhead

Cost management is a critical priority in all market conditions. Private equity firms are under pressure to minimize their operational footprint while maintaining efficiency and scalability. An accounting system would provide cloud-based managed services with automated auditable workflows, reducing manual errors and cut non-productive operational overhead.

Such a solution should also support a wide range of private market fund types and structures, from private equity to private debt and real assets, giving firms the flexibility to diversify without the need for expensive integrations, reducing compliance risks, and scaling operations as their fund strategies evolve.

Geneva® for Global Private Market Managers

SS&C Advent’s Geneva® offers a comprehensive solution designed to empower firms to excel in private markets. Its suite of capabilities includes:

• Investor Allocations: Automated calculation of management fees, waterfalls, and sub-close rebalancing. Maintenance of records of all activity for private equity and debt, including valuations and unrealized gain/loss information on active holdings.
• Portfolio Integration: Seamless integration between portfolio and investor accounting to provide a single integral source of data.
• Regulatory and Tax Compliance: A comprehensive support for various regulatory filings of the industry, including Form PF, AEOIS (Automatic Exchange of Information), and AIFMD (Alternative Investment Fund Managers Directive). Also, full tax preparation services for investor-level and fund-level filings.
• Customizable Reporting: ILPA-compliant and branded reporting templates, along with robust data aggregation, normalization and enrichment tools for in-depth analysis.

Proven Technology and Global Expertise

With more than 350 user-firms worldwide, Geneva® is established as a leader in private market accounting. The platform’s flexibility and adaptability allow firms to pursue new strategies and diversify their offerings without inefficiencies or costly integrations.

By streamlining workflows, supporting diversification, and meeting the highest standards of reporting and compliance, Geneva® enables firms to focus on building strong investor relationships and driving outperformance.

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FINVENT Software Solutions is a producer and distributor of financial software applications and custom engineering services for the investment management sector. The firm serves financial institutions in European and African countries, including asset managers, family offices, investment banks, pension funds and hedge funds.

Finvent is the sole SS&C Advent distributor worldwide, and its products are natively integrated with those of SS&C Advent.

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Disclaimer: Nothing contained in the aforementioned content or its references constitutes an investment solicitation or a recommendation of any type.