FOTechHub Bulletin: Family Office Technology News Roundup – August, 2023

Company news

20 Aug – SS&C Technologies announced it’s acquiring the managed funds administration (MFA) business from Iress, trading software and services provider. The MFA business is one of Australia’s largest third-party fund registries, with around AUD900 billion in managed assets across over 1,400 funds, four custodians and 69 fund managers.

23 Aug – The SEC adopted new reforms designed to enhance transparency regarding expenses and fees within private equity and hedge funds. The new rules require private fund advisers to provide investors new quarterly statements and undergo an annual audit. Here are key takeaways from Cooley and Cambridge Associates.

14 Aug – Canoe Intelligence expanded its partner program to include Versoft Consulting, a boutique investment technology and business process consulting firm serving RIAs, wealth managers, asset managers, and family offices. Canoe and Versoft will collaborate to help clients define their ideal tech stacks and streamline operational processes around alternative investments. Over 250 institutional investors, asset servicers, capital allocators, and wealth managers with a combined $5T in assets under advisement leverage Canoe’s solution to help automate their most alternative investment processes.

14 Aug – MSCI agreed to buy the remaining 66% of Burgiss for $697 million in cash in a deal that combines Burgiss’ private market data and analytics with MSCI’s public market expertise. Since its initial investment in January 2020, MSCI will have invested an aggregate of $913 million to acquire all of Burgiss – a provider of data, analytics, and technology solutions for investors in private assets. Its performance data covers over 13,000 funds representing $15 trillion in cumulative investments across private equity, private real estate, private debt, infrastructure, and natural resources in 195 countries, while the Burgiss Caissa investment analytics platform for institutional investors, created through a merger or Burgiss and Caissa in 2021, is designed to perform exposure, risk, liquidity, attribution, and private equity modeling analysis across multi-asset class portfolios. Burgiss serves approximately 1,000 clients – limited partners, general partners, and financial intermediaries – in 40 countries with 650+ employees across the U.S., Europe, Asia Pacific, and South Africa.

9 Aug – F2 Strategy established its new corporate headquarters in the Chicagoland area. Co-founders Liz and Doug Fritz have also relocated their family from Santa Cruz, CA. The move followed F2 Strategy’s acquisition of Oakbrook Solutions, facilitated by a capital investment from the private equity firm Renovus Capital Partners. Doug Fritz explained that the reason behind the move is to “be closer to our teams and clients” and that “being within a few hours’ flight to most US cities is priceless.” Just a few days later, F2 announced the appointment of Laura Korbel as President.

F2, which quadrupled its headcount to 100 people through the recent acquisition, provides consulting and Outsourced CTO (OCTO) services to firms collectively managing over $2.5 trillion in assets.

9 Aug – Venn by Two Sigma, a portfolio analytics platform for professional investors, launched Report Lab – portfolio and manager analytics and presentation solution to generate client reports and proposals. NewEdge Wealth, a registered investment advisor for ultra-high net worth families, family offices, and institutional clients and a client of Venn, served as a beta tester and advisor for Report Lab.

8 Aug – Portfolio BI and Alkymi, unstructured data processing and automation company, formed a partnership that aims to optimize workflows, uncover insights and improve data governance for alternative asset managers by integrating structured data such as portfolio analytics, market data, securities, positions, and fundamental information with insights derived from financial statements, brokerage/custody statements, ISDA contracts, capital notices, capital account statements, and other unstructured data sources.

Portfolio BI provides a front-to-back platform for order management, portfolio management, and data management and reporting for hedge funds, traditional asset managers and fund administrators. It was created in 2020 from the merger of LUX Fund Technology and Solutions, a SaaS-based enterprise data management and reporting platform, and NorthPoint, a provider of front-to-back office investment management solutions. Both companies were backed by Credit Suisse Asset Management’s NEXT Investors, a fintech growth equity group. In 2021 Portfolio BI acquired Hentsu- a provider of managed services for AWS and Azure cloud platforms.

7 Aug – Knowledger, known for its API and rules-based engine translating investment data from Addepar into general ledger entries in Sage Intacct, partnered with First Rate to support new and current customers with the transformation  of custodian/bank data into Sage Intacct. First Rate has been providing performance and client reporting solutions to investment management institutions for over 30 years. It has relationships with more than 500 institutions with a combined $2 trillion in AUM. Together, KnowLedger and First Rate want to solve the unique challenges of accountants who need to see investment transaction data and have a full view of the accounting relationship of the client.

1 Aug – Former IRS Commissioner Charles (Chuck) Rettig has joined K1x board of directors to help the company’s efforts to digitize data distribution for alternative investment tax compliance. Chuck served as IRS commissioner from 2018-2022 under presidents Trump and Biden. Commenting on this appointment, he said: “I witnessed firsthand the tax industry’s challenges with alternative investments. The digital K-1 is finally happening. Joining K1x’s board of directors enables me to support their efforts to revolutionize alternative investment management by digitizing and distributing data between the folks who need it. K1x is bigger than tax software — the company is remaking how an entire industry goes about its business.” K1x’s digitization efforts align with new IRS plans to offer digital correspondence for the 2024 tax season and paperless processing for tax returns in 2025. See also the press release and more on why Rettig has joined the K1x board.

New clients

Vanilla, an estate planning platform for advisors, lawyers, and consumers, is joined by new clients: Legacy Knight : Multi-Family Office, Presilium Private Wealth, E-Wealth Partners and Tanglewood Total Wealth Management.

Proteus, an alternative investment solutions platform, has a new partnership with Denver, CO-based Nilsine Partners, an independent investment advisory firm, to provide its clients with expanded access to alternative investments.  

Addepar is joined by Clearstead, an independent financial advisory firm, Kolinsky Wealth Management, a 40-year old firm serving high-net-worth individuals and business owners and Aldrich Wealth independent wealth advisors.

People news

Maarten Heukshorst became CEO of Custodiex, real-time, cold storage solutions for custodians, wealth managers and other financial institutions. Maarten was most recently chief commercial officer, EMEA at BNY Mellon Pershing, with previous roles at UPB and Citi.

21 Aug – Opto Investments, a private markets invesment platform, appointed Matt Dunn as head of marketing. Prior to joining Opto, Dunn held marketing leadership positions at PIMCO, Morgan Stanley and Franklin Templeton Investments.

Knowledger welcomed Shannon Sullivan as managing director of business development. Shannon will be responsible for the growth and development of new opportunities while maintaining key relationships with Knowledger’s partners across technology, banks, and custodians.

Product updates

28 Aug – SS&C Salentica released the first major release of 2023 for Salentica Elements – its turnkey CRM for financial services. One of the biggest features is Workflow Manager.

22 Aug – K1x, an automation software for alternative investments data, announced it launched K-1 Next Gen Reader, part of the firm’s K-1 Analyzer product that processes PDF K-1s and K-3s into structured data.

QPLIX, a German wealthtech introduced QPLIX Mobile – new app for iOS and Android, in the spirit of “Your Wealth in Your Pocket” for wealth management professionals and clients of family offices, independent wealth managers, and private banks.

BILL scrapped its 6 years old shared services agreement to provide an embedded bill pay experience in QuickBooks Online. Going forward, customers who use this embedded functionality will access their bill pay accounts and capabilities by logging directly into bill.com, rather than from within QuickBooks. Customers will have until September 19th to transition. All QuickBooks customers using BILL will continue to be able to sync their data between BILL and QuickBooks. The reasons for this, according to BILL is that “the breadth of our platform capabilities has advanced considerably over the last several years creating a new category of products for financial operations.”

AgilLink, bill pay and accounting services provider, successfully completed American Institute of Certified Public Accountants (AICPA) Service Organization Control (SOC) 2 Audit.

Thought leader insight 

Continuing on the theme of the K1 Hell program held back in late May and the some of the related news in this newsletter, we would like to highlight this brief from Gary Mills, an independent consultant: Schedule K-1 Data Capture: Treating the Pain Points of This Most Manual and Painstaking of Tax Compliance Processes.

The Schedule K-1 Data Capture process, known for its manual and time-consuming nature in tax compliance, presents challenges due to the quantity, content, and timing involved in handling these documents. This problem is particularly evident when dealing with K-1 footnotes, which are complex and lack standardization. A survey conducted by the Larry Kraus Family Office Tax Institute identified the main pain points as manual data entry, inconsistent data capture from footnotes, lack of automated tracking and bridging of data, and the absence of automated means to track K-1 receipt and integration with downstream software. To address these issues, various technology solutions and processes have emerged, but no single solution covers all aspects. Gary says it’s crucial for organizations to assess their specific needs, prioritize pain points, and decide whether to engage independent consultants or those associated with specific solutions to streamline their K-1 data capture process. Read more on the link above.