Private Markets Firms Face Major Challenges in Opening and Maintaining Accounts
LONDON--(BUSINESS WIRE)--A seemingly innocuous and run of the mill task, accounts and payments have become overly complicated, painful and time consuming for professionals operating in private markets. Today, Alpha Group International plc (LON:ALPH) is launching a new guide for fund managers and service providers. The guide offers advice and direction on the various aspects involved in setting up, managing and maintaining accounts, as well as how to ensure payments are made successfully.
An uptick in regulations coupled with increasingly complex dynamics between investors, service providers and banks has complicated opening accounts and making payments. Private capital fund managers are now having to tackle nuanced and time-consuming onboardings with account providers, with each having their own unique process.
Delays in setting up the account can impact investor confidence; LPs might start to question a GP's ability to execute on a deal. At best, the fund manager has to clarify AML and KYC information. At worst, it could mean their deal deadline is missed, which could mean returning capital to investors.
If GPs haven't considered and planned for this level of complexity, it's possible (and from our experience highly likely) that the lack of transaction activity, coupled with the heightened AML and KYC requirements, will render their account commercially unviable for their banking provider. When that happens, GPs can quickly find themselves in a situation where their account is being closed at short notice.
This comprehensive guide details the various aspects involved in setting up, managing and maintaining accounts, as well as how to ensure payments are made successfully. Alpha also explores the potential risks, downfalls and solutions, including:
Key considerations on types of accounts and providers
Advice on account maintenance and management
Managing accounts across multiple jurisdictions
Exploring common challenges and what can go wrong
Being strategic when it comes to accounts and payments.
Alpha provides the world's first purpose-built global accounts solution for the alternative investment industry. Fund managers and service providers can quickly and easily access local accounts across key investment jurisdictions and manage them all in one place, with the proactive support of a dedicated team who understands the industry. The company is listed on the FTSE 250 of the London Stock Exchange and supports close to 2,000 investment managers with a range of alternative banking solutions.
James Yates, Managing Partner and CFO at IK Partners said, 'Having often experienced delays and uncertainty when trying to open bank accounts for investment entities, we decided to trial Alpha's accounts solution. Since then, we have opened multiple accounts and each time have found the process to be fast, straightforward, and reliable. Their high levels of client service and ongoing support have been very refreshing – they are highly attentive, responsive and have a clear understanding of our industry and the pressures that come with it.'
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