5 minutes with… Linnovate Partners

The Drawdown (TDD): Tell me about your new role at Linnovate?

Redmond Lee (RL): I’ve just been appointed managing director for Linnovate’s Europe office, based in London. I’m responsible for all aspects of the company’s presence in Europe, from enhancing our visibility and presence to sales, and operations.

TDD: What were your previous roles in the space?

RL: I have been in the alternative assets operations space in London for nearly 18 years.

When I first moved here from Sydney I worked with Accounting Frameworks, a private equity-focused software company. I went on to join eFront in 2004 and was later promoted to managing consultant, where I worked for seven years.

In 2012 I co-founded technical services consultancy IT-Venture, where I remained a partner until 2018. This year, I’ve been independently consulting to software companies, supporting scale-ups and expansions.

TDD: What was most compelling about Linnovate? What was the stand-out factor that made you want to work for the company?

RL: I’ve known Linnovate’s CEO Henry Lin from our time together at eFront around ten years ago. After reaching around USD $35bn of assets under management, his plan was to launch the European branch of the company in the second half of 2019, and so he approached me.

The key stand out factor is that Linnovate is making the business of fund administration and portfolio monitoring more human. By allowing people to not have to spend their lives imitating a computer and dealing with data entry, then we can genuinely support our clients.

Linnovate’s key difference is about mechanising a large proportion of the bulk processes, allowing our clients to better manage their investments.

TDD: What’s the story behind Linnovate? How did it come about?

RL: Linnovate applies fintech and automation to what is still a heavily manual world, with the ultimate aim being to transform the GP / LP relationship by creating transparency and reducing inherent frictions in private markets data.

Henry tells me that the story behind Linnovate comes from seeing old ways of dealing with very similar problems. For instance, each time we are asked for a fee or carried interest calculation, we tend to go back to first principles and start with a spreadsheet and a data dump.

Henry’s logical mindset saw him apply a technological solution to problems with a repeatable framework. When we first offered our fund administration and portfolio management services, we knew that we had to minimise any rework needed to prepare our deliverables – the only way is to create an infrastructure which did most of the bulk calculations and processes automatically.

TDD: What will be your biggest challenge this year?

RL: Although we’ve been around since 2016 in the Far East, like with any new geography, new clients are absolutely critical to our success in the European region. To do this, we need to demonstrate how our service can create practical value for our clients, freeing them from manual and repetitive labour. I have many challenges this year, but the key one will be to create some blue water between us and some of our traditional competitors. The industry struggles with trying new things - they take comfort from seeing their peers using the same products.

TDD: Does Linnovate have the potential to disrupt the PE fund admin industry?

RL: Yes absolutely we believe we have the potential to disrupt. We’re doing it already; our clients are using all of the processes and systems.

In alternative assets, we are forever dealing with data silos, which particularly impact the work of administrators, and even more so if the administrators perform additional services such as portfolio monitoring. Linnovate has created our own “ecosystem” called SMP Net, which allows investors, fund managers, and entrepreneurs to collaborate using distributed ledger techniques for data transfer. Therefore, reports are made available on an immediate basis to those who need it – and all based on data which is not disputable. While there continues to be a lot of talk about blockchain, our clients are already living it.