In response to increased demand for outsourced alternative asset administration, Northern Trust announced today enhancements to its private equity support with the launch of its capital call execution service.
The service allows clients to gain operational efficiencies by outsourcing the processing of capital calls. Capital calls are periodically issued by general partners to their clients and require investors, upon demand, to transfer a previously agreed upon amount to fund strategic investments.
“Northern Trust's new capital call outsourcing service has made it easier for us by reducing the amount of time we previously spent on the capital call execution process.”
Intended for portfolios with more than 20 private equity investments, clients notify Northern Trust of the initial capital call via the automated Trade Order Entry system. Northern Trust then handles all subsequent capital call payments directly with the private equity general partners, either based on standing direction or individually based on client approval.
“As our clients have invested more heavily in alternative assets, we have sought ways to make their processes more efficient,” said Pete Cherecwich, Americas head of Corporate & Institutional Services at Northern Trust. “By taking the tasks associated with capital calls out of their hands and automating the process, we have freed them to focus on the investment decisions rather than the administrative tasks.”
Key aspects of the enhanced capabilities include:
- Streamlined global operational process for handling subsequent capital call processing
- Direct communication between Northern Trust and general partners regarding subsequent capital calls
- More time focused on investment decisions and less time spent in administering capital calls
As interest in the efficiencies gained through the service grows, Northern Trust has added more clients to the product. According to Jonathan Buchbinder, Director of Treasury at the Art Institute of Chicago, “Northern Trust's new capital call outsourcing service has made it easier for us by reducing the amount of time we previously spent on the capital call execution process.”
Northern Trust’s services for alternative assets offer end-to-end solutions that focus on industry leading processes and detailed on-demand reporting that includes:
- Proprietary workflow to ensure timely and accurate collection and processing of manager statements including on demand valuation arrival status reports
- Fully detailed reporting of alternative assets transactions and valuations
- Outsourced services for capital call execution, preliminary valuations, and document retention
- State of the industry performance analyses including internal rates of return, funding ratios, public market equivalence benchmarking, vintage year comparisons, transparency analyses, and cash flow projections.