Private equity managers and hedge funds rely on software tools to streamline internal processes, ensure regulatory compliance, and deliver greater value to investors by reducing overhead costs. But which software solution is best for a given investment firm? Which private equity software or hedge fund software tools are a "must" for a fund that can scale?
We'll take a look at the criteria that matter most to the people who matter the most: not software developers or marketers, but the CTOs, head of internal IT and other managers who must choose the right software for their firms' specific needs.
First off, let's acknowledge an unfortunate fact: no single software solution is the blindingly obvious choice for hedge funds and private equity firms.
The best-in-class solution for a given company is simply the software that best fits its needs and goals. Which requires a bit of legwork and a good deal of strategizing by CTOs and purchasing managers. That said, there are some things to look for when comparing software tools for expense allocation and compliance.
Several software packages include tools for expense allocation, and most include functions that help firms stay on the right side of Dodd-Frank and other security-driven regulations. But too often, you've got to read a fair bit of product description before finding anything about those functions.
In the race for market share, many developers have touted the virtues of bringing as many functions as possible under one roof. This lets them appeal to a wider range of industries as well.
That's all well and good, but it also involves some significant tradeoffs. What's best for your financial team's expense-accounting work may be tied to a CRM that serves your customer-facing teams less well (and may have been developed primarily to serve another industry altogether). Your firm didn't hire its employees in a single package, and their roles aren't interchangeable. The software they use needn't be monolithic, either.
We built Resolvr after a major hedge fund asked us to develop a solution that streamlined its expense-accounting operations and helped them demonstrate regulatory compliance while ensuring that they remained compliant into the future. The result is a robust, AI-powered tool designed for a crucial job and optimized for a single industry. Our clients get what they need, and pay for what they use, without the nagging sense that they're using a real estate investor's software platform. There are a number of tools that are potential low hanging fruit opportunities for hedge funds and private equity, but let's focus on expenses in this blgo post.
With that kind of specialization comes the danger of "siloing" data and solutions. A purpose-built solution may work best for the employees who use it most, but for the entire organization to see the benefits, each solution must be integrated with the entire IT ecosystem.
We are conscious of that, and accordingly offer a slate of APIs that allow full integration with a wide range of platforms. Better yet, every purchase of Resolvr includes free integration support by in-house experts to ensure that it conveys its fullest benefits in even the most idiosyncratic environments.
Poorly managed expense allocation can drain funds of operating capital, withhold value from clients, and even put funds in a precarious position with regulators. The best response to those threats takes square aim at them while easily conveying its benefits throughout the organization, and is purpose-built for hedge funds and private equity. In a word, Resolvr.
If expense allocation software (or spend management software) could help your firm, get in touch with us or find out more:
Gary R Markham
Gary R Markham is co-founder and Chief Executive of aXpire fund solutions, which designs, develops and deploys an array of expense management tools. He is an author of many articles, regularly speaks at conferences, panels and symposiums, a Global Director of the Hedge Fund Association, a recent recipient of the Keys to the County of Miami Dade. Gary has over 20 years experience in FinTech, specializing in spend, expense management, vendor and allocation and apportionment software solutions.