Guide to Outsourced Finance & Accounting for Investment Management Firms: The Finance as a Service solution

Alternative Asset Managers face a pressing dilemma. Their focus is rightly on managing their investments and relationships with investors, but they still need to fulfill their duties and responsibilities for their own management company. And if such duties are postponed or under-managed, the fallout, from regulators and investors alike, can jeopardize the success of the entire firm.

This article examines how Investment Managers can tackle the finance function for their own management company, with a focus on the burdens and benefits of the various options. Many Managers begin using some in-house solution, eventually migrating to rely on an outside firm or adding it to the lists of duties for a fund administrator. But a third option is growing in popularity: outsourcing the finance function, by using a “Finance as a Service” model.

For any investment managers about to launch a fund, or who are relatively nascent in their evolution, the clock is ticking. The right choice for serving the finance function of the management company can mean the difference between establishing best practices early, the kind that allows the finance function to stay nimble and responsive for the life of the firm or facing the consequences of bad habits. Habits that began when the Firm chose the easiest solution, rather than one that truly suited their needs.

Consero FaaS: Disrupting the Outdated Traditional F&A Model

  • Cash to GAAP conversion
  • Clean-up work
  • Interim oversight & support
  • Accounting software Implementation

Build it Yourself Solution

  • CFO / Interim CFO
  • Consultants / VARs

Consero FaaS Solution

  • CFO / Interim CFO
  • or Consero Interim CFO
  • Consero Setup/Transformation
Ongoing F&A
  • Monthly financials
  • Daily accounting support
  • Management reporting
  • Integrate add-on acquisitions

Build it Yourself Solution

  • CFO
  • Controllers & Accounting Team
  • Enterprise Accounting Applications

Consero FaaS Solution

  • CFO
  • or Consero Fractional CFO
  • Consero FaaS Enterprise F&A Software and Services

New PE Platform Investment F&A Challenges

Founder Owned Company Accounting:
  • Existing accounting done on a cash/hybrid basis
  • Run on SMB accounting software and other disparate applications
  • Inability to produce auditable financials
  • Lack of know-how to develop projections & KPIs
  • No consistency/structure to customer contracts
  • Underqualified staff
  • Non-scalable manual processes
Carve-Out Accounting:
  • Required to move off parent company accounting applications in a timely fashion
  • Have to build an entire F&A team
  • No documented operational policies and procedures
To Optimized Finance & Accounting:
  • Monthly financials available in 5-10 business days
  • Audit and diligence ready support details
  • Integrated enterprise grade accounting software
  • Budget and forecast reporting
  • Business KPIs
  • Efficient & scalable processes for rolling in add-ons