By: Allvue Team

May 23, 2023

Many private debt managers, despite the overall size and complexity of their portfolio, end up managing their back office through generic, retail tools, such as Microsoft Excel, that are poorly suited to meet the needs of the niche asset class.

They do this more through necessity than choice. To find a solution that has been both purpose-built for the private capital industry and that can easily integrate with the other phases of the private debt lifecycle has, previously, been near impossible.

Fortunately, Allvue’s new Consolidated Back Office solution changes that.

Our Consolidated Back Office system combines our industry-leading Investment Accounting solution, long the first choice for private debt managers, with our award-winning Fund Accounting solution, renowned in the private equity industry for providing GPs a true general ledger. This fully-integrated solution helps private debt managers and direct lenders grow their business while maintaining their head count.

The Challenge of Using Excel

Many private debt managers and direct lenders feel locked into Excel for their back-office needs, both because they see few better options available and because of how baked into Excel their processes and data have become.

But Excel opens managers up to a number of challenges and risks.

For one, it makes it extremely difficult to aggregate data across all of your debt investments, obscuring a true view of your portfolio. Additionally, because of how manual Excel is, collecting and maintaining consistent properties and models on investments becomes a time-consuming and error-prone process. This is further complicated by unplanned and unscheduled events, such as early repayments, late payments, or under/over payments.

Other nuances become challenging to factor into a system not designed for the bespoke needs of the asset class. Coordinating changes across accruals, tracking multiple accruals or draws on the same investment, managing investments with different payment frequencies – all of these begin to feel like a complicated balancing act that can only be sustained for so long.

The Challenge of Non-Purpose-Built Systems

While there are of course many other accounting platforms out there, some that boast remarkable advantages over a system as general as Excel, many of those advantages disappear when applied to the private debt markets.

For solutions focused on the finance industry in particular, most are focused are the public credit space. They weren’t built to handle investments that require multiple concurrent accruals, or that have funded, unfunded and/or reserve components, or that can be converted to risk-free rates such as daily SOFR, SONIA, and others. When handing private assets, they begin to feel as clunky and cumbersome as Excel.

Additionally, many of the tools that are designed for private capital are point solutions. They integrate poorly, if at all, with the other solutions in a private debt managers tech stack. Upgrades of one system break the connection with another, causing expensive and drawn out delays where each vendor blames the other.

What Sets Allvue Apart

Our Consolidated Back Office solution sets itself apart from the competition by a handful of essential but distinct features:

• We provide a simple, proven integration: Because our system operates on a single source of truth, our Consolidated Back Office is able to streamline your data management workflow and seamlessly integrate with your broader investment lifecycle.
• We localize support and responsibility in a single vendor: Rather than needing to manage a disparate, disconnected tech stack, with conflicting parties and priorities, we provide an integrated experience that reduces manual effort and error through a single point of entry.
• We simplify product upgrades: Our cloud-based system leverages both our proprietary cutting-edge technology and Microsoft’s enterprise framework to provide a platform that keeps you at the forefront without forcing costly upgrades.

WATCH: ALLVUE IN ACTION: MANAGING COMBINED CREDIT AND EQUITY PORTFOLIOS

What You Get with Allvue

Investment Accounting

Our Investment Accounting solution is designed from the ground up with proper accounting checks and validation in place on every transaction. Our browser-based investment accounting system allows for easy deployment, scalability and maintenance, and offers seamless integration with our Front Office solution and third-party systems.

With Allvue’s Investment Accounting solution, you can:

• Track all investments and calculate the accruals, cash flows and P&L at the tax lot level
• Fully manage broadly syndicated loans, private loans, credit products and equities
• Easily generate notices for borrowers and or lenders for interest and principal activity
• Automatically send the accounting results of your investment activity to Allvue’s Fund Accounting solution or a 3rd party GL.

Fund Accounting

Our Fund Accounting solution was built to handle the complex fund structures and requirements of private capital fund accounting. Acting as the cornerstone of your back office operations, our system allows you to:

• Access a robust library of financial reports and flexible report writer for custom output
• Leverage our waterfall module which allows for carry fee calculations with detailed modeling capabilities
• Manage complex investor allocations, transfers, equalization and equity pickup
• Combine financial statement reporting, a multi-currency general ledger and workflow standardization in one complete system

An industry leader – in both private debt and accounting

The true power of our Consolidated Back Office offering is that it combines two of the strengths Allvue has built its industry-leading reputation on.

As long-established practitioners in the private debt sector and as an award-winning accounting and reporting provider, our Consolidated Back Office solution leverages Allvue’s extensive experience and expertise to provide a truly unique solution.

Learn how Allvue’s fully integrated system can help your firm grow

As fund managers raise more funds, bring on more investors, and need to navigate complex, changing markets, the state of their underlying technology becomes increasingly important. Allvue can deliver the consolidated back-office capabilities that diversified funds require to help keep their growth moving forward.

Our truly integrated platform that gets information where it needs to be – across investment teams, investor relations, and the back office. Our technology is user-friendly, cloud-based, and pulls together all your data and processes into one unified system. Everyone in the firm works from a single source of truth, enabling quick decisions based on accurate information.

With a commitment to product enhancements and innovation and a 100% focus on private capital managers, Allvue helps firms make better investment decisions, enables them to build deeper relationships with investors and prospects, and allows portfolio managers, CFOs, and investor relations professionals to spend less time getting information and more time using it.