Global Custodian Private Equity 2017 | Página 4

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EDITORIAL
Managing Editor
Welcome to the Private Equity
Issue!
T
he people have spoken and we have listened.
Tipped as ‘the space to watch’ by many of our readers, the team at Global
Custodian turned its attention back to private equity administration after a four-year
spell without a survey for the funds now seen as a return to salvation.
Given the interest around the topic, and the eagerness of contributors, we decided
to re-launch the survey and produce a supplement to our annual hedge fund maga-
zine in the form of this private equity supplement.
Estimations vary on the percentage of private equity firms using external adminis-
trators, but from our research it looks like somewhere between 20-35%.
Over the next few years this is expected to double, due to a range of factors.
First and foremost, private equity – as an alternative asset class – has enjoyed solid
growth over the last few years as investors seek absolute, non-correlated returns
and diversification. A BNY Mellon study in 2016 found that 97% of investors said the
asset class had met or exceeded return expectations during the preceding 12 months.
This is contrast to the fortunes of hedge funds over a similar timeline, leading to
investor re-allocations.
This growth in private equity – in terms of both capital flow and new funds – is
forcing firms to look at outsourcing, as operations become too large to handle in-
house. A disdain from investors for self-administration is acting as an additional
catalyst.
This is especially true when additional funds are launched, and suddenly an admin-
istrator makes sense, particularly from an operational and due diligence standpoint.
Subsequently, fund administration providers have been taking note and are now
looking to capitalise on the opportunity. It was
While it might be viewed by some as having no added-value, suddenly the ‘going it
alone’ route seems far less attractive. As opposed to five or ten years ago, administra-
tors are now far better equipped to handle the stringent demands of private equity
firms.
So given all the evidence above, we decided that a private equity special was the
way to go this summer, thanks to the ever-amazing input from our readers. In this
issue you’ll find a macro view on the current success of private equity funds (page 8)
as we look at whether it will continue in the coming years. We also look at the rising
popularity of ESG strategies (page 22) and the potential of blockchain, following deal
between Northern Trust and IBM earlier this year.
Finally our main feature (page 14) looks at how things have changed in the private
equity administration world since 2013 - when we last did our PE survey.
Enjoy the issue, let us know your thoughts, and as always we’re also happy to listen
to suggestions, whether it’s a feature idea or theme you think we should be covering,
then feel free get in touch.
Jonathan Watkins
Managing Editor
Global Custodian
4
Global Custodian
The Private Equity Issue 2017
JONATHAN WATKINS
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Deputy Editor
JOE PARSONS
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Senior Contributing Editor
RICHARD SCHWARTZ
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Product Development Manager
BEENISH HUSSAIN
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Research & Operations
KAREN DELAHOY
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CHARLES GUBERT
DESIGN & PRODUCTION
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