PE firms under pressure to outsource

Private equity funds are under increasing pressure to outsource parts of their operations, it has been found.

According to Ocorian, there has been a significant increase in enquiries from PE firms looking to outsource since last year. This comes as regulators warn managers to expect more fines and enforcement actions for overcharging investors, stretching in-house compliance teams and causing GPs to reassess how they operate.

Mary Bruen, regional head of fund services, Jersey, Guernsey & Isle of Man, Ocorian, says there is a greater expectation that fund managers should focus on its core areas of expertise rather than getting distracted by ancillary functions.

“GPs need to focus on their client relationships at one end and on maximising the value of its assets at the other. The challenge is that in between those two pillars, there is an awful lot of hard work that needs to be done. They must decide whether to take on that complexity itself, which can be costly and a headache, or rely on third parties with a depth of understanding of the underlying asset,” Bruen said.

This story was originally published on our sister brand, Real Deals.