Technology, Regulation and Talent – these were three key themes discussed at the LPGP Connect CFO/COO Private Debt Forum in Chicago this past week, where CEOs, CFOs, COOs and other professionals that specialize in the private credit market came together to share their insights and best practices for managing the myriad of items which require their attention.
At the top of the list was how the right technology is paramount in streamlining and making operations as efficient as possible. With the sheer volume of activity that is unique to the Private Debt space, as one CFO put it, “Excel doesn’t cut it anymore” and firms need to embrace the right technology or risk being left behind.
CFOs also noted that SEC audits of RIAs are increasing, and in certain cases could last as long as 3 years with all the back and forth required to secure the appropriate data. Having documented, robust, secure, auditable systems and supporting information is key in mitigating the burdens associated with a prolonged audit of firms with limited resources.
On the topic of Talent Management, it was refreshing to see that more Private Capital firms are recognizing the need for a dedicated Human Resources leader to manage the changing demographics and needs of their talent pool. This covered everything from diversity and inclusion, to succession planning and recruiting best practices, and rewarding strategies that go beyond what has been historically done within the Private Capital space.
We were pleased to have our own Raoul Kamath moderate a panel on “Carry Plans and How to Structure Them” with a focus on the differences between traditional Private Equity firms and Private Debt funds, from the perspective of GPs, Fund Administrators and Law Firms. Our distinguished speakers included Tom Costantino – Co-Founder of Bluffview Energy Capital, John Janssen – Director of Alternative Investments at SEI, and Kevin Neubauer – Associate at Seward & Kissel. The discussion ranged from establishing carry structures – for first time funds or established vehicles – taking the Limited Partners’ view into account, to the impact of tax reforms.
There was also a connection with previous panels that covered talent management, and how the structure and transparency of carry plans can play a positive role in retaining and recruiting key talent for the management companies, when paired with the right platform.
EWM Global continues to lead the digital transformation of the carried interest and employee co-investment experience for GPs and their most valued employees worldwide.