The private equity industry is around half a century old, while buyouts are as old as capitalism. Today, alternative investments have become an essential part of the portfolio for many institutional investors.
Many investors stick to old-fashioned paper-based processes when making these types of investments. For both investors and RIAs, however, there are many benefits to be gained by digitizing the process.
Gridline's innovative platform overcomes many legacy challenges of investing in alternatives by digitizing the process, including discovery, subscription, administration, and reporting. The platform provides access to a curated list of investment opportunities and reduces the administrative burden associated with investing in alternatives.
Easier And Faster Closing
Private equity funds have a long road to closing, with numerous forms and documents that have to be completed. Fundraising and closing include marketing the fund, term negotiation, initial closing, and additional closings.
For investors, too, the process is often manual and paper-based, requiring the completion of multiple forms. This can be a time-consuming process.
With Gridline's platform, investors can complete their profile once, using it across all investments. This includes auto-populated subscription agreements and digital signing. This makes it easier and faster to close an investment.
Centralized Dashboard And Accurate Reporting
As an Institutional Investor report puts it, "private equity is notoriously opaque.”
This can make it difficult for investors to keep track of their investments and performance. Tax management is another complex area that is constantly changing. New proposals would bring about surtaxes for wealthy individuals, changes to the taxation of carried interests, changes to net investment income tax, and more.
With Gridline's platform, investments are centralized in a unified dashboard. This provides investors with accurate performance reporting and treasury and tax management over the fund's lifecycle. For RIAs, the native Gridline reporting platform provides a clean, templatized view of your clients' funded and unfunded commitments, asset class allocations, and their investment value (NAV) at any given time. This is easily distributable to your clients.
Effortless Fund Administration
Fund administration is a complex and time-consuming task. A veritable alphabet soup of regulatory agencies has a say in how funds are offered, from the SEC to FINRA to the CFTC. Then there are the compliance requirements, which can be onerous.
Gridline's platform considers all of this and provides a complete fund administration platform that includes KYC and AML checks, which are legally required for most financial institutions. The platform's payment facilitation includes unique account numbers that automatically track the transfer's processing status, post a ledger entry when the transfer settles, and reconcile account balances.
In addition, Gridline's platform implements double-entry accounting for each investment and creates a capital account balance upon signing the investment. The system leverages a tree-based hierarchy whereby each investor has their ledger with account balances automatically aggregated up to the total funds capital account. This makes it easy for investors to see their investment value (NAV) at any time.
The Bottom Line
Gridline's platform provides many benefits for both investors and RIAs when it comes to alternative investments. The platform makes it easier and faster to close an investment, provides accurate performance reporting, simplifies fund administration, and more.
While old-school processes may have been enough in the past, today's investors need a more modern solution that can keep up with the pace of change. Gridline's platform is designed for the future of investing.