Thought Leadership / Commentary / Is a Private Investment Desk Right for Your Family Office or Firm?
Posted by Mirador
A private investment desk is a specialized service that helps family offices and wealth management advisors manage their private investment activity. For most advisors, managing the details of private investments can be a daunting and time-consuming effort, with dozens of tasks required to support the activity.
“Even for modest sized private investment portfolios, a lot can happen across client accounts, and it can be overwhelming to stay on top of all the associated details, actions, and follow-up. That’s where a private investment desk comes in,” says Micah Montiel, Head of Mirador’s Private Investment Desk.
So what does a private investment desk handle? Typically, a private investment desk’s responsibilities can be broken down into four key functions:
- Private Investment Closings
- Capital Call Management
- Private Investment Actions
- Investor Relations with Funds
As you’ll see below, each function entails an enormous amount of work, time and attention to detail. Even a small mistake can be costly. A well-trained and well-run private investment team acts an extension of its client’s team and keep them out of this administrative vortex so they can focus on building firm and client value, knowing that their private investment tasks are being managed efficiently and effectively.
A Closer Look
Private investment closings are a complex process that require extensive knowledge of procedures and requirements, setting the table for the entire private investment lifecycle. With time-consuming and esoteric requirements for each closing, experts are deployed to organize and facilitate subscription doc pre-filling, KYC/AML and PII management, and work directly with fund managers to finalize the close. Getting these tasks right the first time eliminates errors that can compound later on and helps avoid missing critical deadlines.
Second, capital call management is one of the most critical aspects of private investment management. Ensuring timely and accurate capital call execution becomes more complex as portfolios grow. Key capital call management tasks include capital call validation, wire preparation, and unfunded/commitment reconciliation to name a few. This process can be made much easier when paired with well-designed liquidity reports as part of a client’s performance reporting output.
Next, consider the resource requirements for handling on-going private investment actions across a large client base with hundreds of private investments. To properly attend to the volume of tasks, such as Offering Memorandum and LP Agreement reviews, fund document management including K-1 retrievals, and even liaising with Investment Committees, takes a well-organized approach. A professional private investment desk is highly trained to manage these tasks accurately and on-time.
Lastly, maintaining investor relationships with funds is an oft-overlooked but crucial aspect of private investment management. A private investment desk team will act as a proxy on behalf of clients, maintaining regular and detailed interactions with funds and staying ahead of next steps so that clients don’t have to. Tasks include client re-registrations, interest transfers, wire updates, AML documentation/upkeep, among others.
As a fiduciary to UHNW investors, advisors should have the freedom to develop a plan that meets each clients needs, without being deterred by possible administrative burdens. A professional private investment desk provides advisors with the expertise, and thus confidence, that the tasks associated with private investments will be handled accurately and on-time.
Mirador, Inc.
Providing best-of-breed financial reporting services, alts data management, middle office services, and technology solutions and products to the U/HNW wealth management industry, since 2015.
