BNP Paribas’ Securities Services business supports asset managers in optimizing their operating models.
With the growth of this asset class, investment structures are becoming increasingly complex to meet the specific requirements of institutional investors. At the same time, asset managers are exploring ways to make alternative investments more accessible.
“In a shifting macroeconomic environment, managers need to reinvent themselves,” comments Karine Litou, Global Deputy Head of Private Capital and Global Head of Products and Solutions Private Equity within BNP Paribas’ Securities Service business. “On the one hand, they are facing growing pressure on liquidity from investors. On the other hand, the diversification of investor profiles generates specific structuring needs. This results in rising operational complexity, combined with transparency requirements that must be properly addressed.”
“The current pressure on liquidity is largely linked to the lengthening of investment cycles and a slowdown in M&A activity” Karine Litou, Global Deputy Head of Private Capital and Global Head of Products and Solutions Private Equity , BNP Paribas
A Market in Transformation
These changes call for highly specialized expertise to implement the most suitable solutions. By relying on the outsourced services of BNP Paribas’ Securities Services business, managers gain access to in-depth expertise as well as shared technology platforms to support the transformation of their business.
“One of the key challenges lies in the need to support portfolio companies over longer periods, while also meeting the expectations of some investors looking to regain liquidity,” continues Karine Litou. “This requires setting up complex structures capable of managing all needs in a coordinated way. These may include multiple feeder funds and multi-currency vehicles built around a master-feeder structure. Very often, it is also necessary to offer direct co-investment opportunities.”
In recent months, open-ended (Evergreen) funds dedicated to institutional investors have also emerged, offering greater flexibility in managing liquidity and the duration of support provided to portfolio companies. At the same time, managers are keen to raise funds from private clients, reflecting a drive to democratize this asset class. This has led to the hybridization of investment vehicles, combining private assets with listed ones in a single portfolio.
“Managers now have access to new automation capabilities” Karine Litou, Global Deputy Head of Private Capital and Global Head of Products and Solutions Private Equity , BNP Paribas
Optimizing Operating Models
“We are now well positioned to help managers optimize their operating models and streamline processes,” explains Karine Litou. “Beyond our role as central administrator, we have developed a comprehensive suite of services to better address these new needs, optimize liquidity management across all structures, and push further in terms of reporting.”
Technology is, of course, an indispensable ally. To support the expansion of this asset class, BNP Paribas provides a range of tools tailored to managers’ needs. “Our clients now have access to new automation capabilities, enabling them to manage this complexity more efficiently while reducing the risk of error,” adds the executive. “Our expert teams, with a deep understanding of client structures, operations, and the mechanics of different asset types, assist with tool implementation and support automation. This provides managers with a more responsive service, a consolidated view of performance and operations, and easier access to information.”
A Multi-Domicile Platform
Technology also enhances interaction between outsourced central administration and the manager. For example, BNP Paribas’ CapLink Private portal allows managers to interact directly with the bank’s Securities Services teams to retrieve data or validate documents. “The platform adapts to clients’ organizations, with the ability to handle multiple domiciles, from Luxembourg to Singapore via France. It consolidates data and enables more efficient management of all structures. This helps streamline interactions and ensures consistent operational management across increasingly complex structures.”
Enabling Manager Agility
By helping managers optimize their operating models, BNP Paribas’ Securities Services business enables them to respond to growing investor demands, improve their cost structures, and, in doing so, accelerate fundraising.
First published on PAPERJAM.
