Industry: Real Estate Debt

Location: New York, NY

Background:

The CFO of a $8 billion investment fund faced significant challenges with their sole fund administrator. Issues included poor quality control, high team turnover, and frequent mistakes, which impacted the fund's operational efficiency and accuracy across various critical functions. A major source of frustration was the administrator's siloed team structure, which created communication barriers and delays, particularly when addressing complex waterfall calculations or responding to investor queries about performance data.

Challenge:

Relying on a single administrator led to operational risks and inefficiencies. The CFO needed to rightsize this relationship to ensure better service quality, reduce errors, and create a more resilient operational structure that aligned with the fund's specific needs and strategic objectives.

Solution: Maybern Platform Implementation

Approach:

1. Admin Performance Analysis: The CFO conducted a detailed assessment of the current administrator's performance, identifying specific areas of concern across key functions such as capital calls, distributions, preferred return calculations, and management fees.
2. Solution Evaluation: After researching various options, the CFO identified Maybern as a powerful tool that could enable the fund to bring critical services in-house and reduce reliance on external providers.
3. Implementation Planning: The CFO developed a strategy to leverage Maybern's capabilities for rightsizing their fund administration approach, focusing on bringing key functions in-house while maintaining necessary external relationships.
4. Operational Restructuring: Based on Maybern's capabilities, the CFO implemented a refined model, bringing critical functions in-house while selectively outsourcing others to achieve the most effective balance of internal control and external expertise.

Results:

1. Centralized Data Management: Maybern's platform allowed for the consolidation of historical performance data, creating a comprehensive view of fund operations and establishing a single source of truth for fund-level and investor-level cash flow data. This centralization enabled executive dashboarding, providing quick access to key metrics across all funds.
2. Strengthened Internal Teams: Maybern significantly enhanced the capabilities of internal teams. By automating data compilation and reconciliation processes, team members could now focus on analyzing data rather than managing it. This shift allowed for more strategic decision-making and value-added activities, elevating the overall performance and expertise of the internal teams.
3. Improved Preferred Return Calculations: The system provided precise and automatically updated pref calculations, viewable at any time and down to the commitment/investor level.
4. Streamlined Management Fee Handling: Quarterly fees were calculated rapidly, with easy processing of fee offsets and breaks. The system efficiently handled multiple side letter arrangements and provided clear insights into gross to net management fee calculations.

Long-term Impact:

By choosing Maybern as their rightsizing solution, the CFO not only addressed immediate challenges but also positioned the fund for future success:

1. Continuous Performance Monitoring: Real-time tracking of both in-house and outsourced operations, with the ability to easily access and audit LP-level performance data, including IRR calculations at individual and aggregated levels.
2. Data-Driven Decision Making: Enhanced ability to perform scenario analyses for operational optimization, supported by centralized dashboards providing key metrics across all funds.
3. Scalability: Flexible structure to adapt to changing fund requirements and market conditions, enabling growth of future funds without having to increase internal resources by leveraging technology.
4. Risk Mitigation: Reduced vulnerability to single-point failures in fund administration.

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Conclusion:

The strategic implementation of Maybern enabled the CFO to move from a problematic single-provider model to a more balanced, efficient operational structure. By bringing critical functions in-house, the fund gained direct control over key operations while selectively maintaining external partnerships, creating a tailored, resilient, and scalable framework. This transformation addressed immediate administrative challenges and set a foundation for ongoing optimization and growth. Maybern empowered internal teams to focus on strategic analysis over data management, fostering a value-driven culture that supports better-informed decisions and enhances investor reporting.