IVCA Feature: New Member Profile of PEF Services LLC

IVCA Feature:  New Member Profile of PEF Services LLC

June 8, 2016

The membership is the lifeblood of IVCA, and as it expands it offers opportunities for new members, in addition to the veteran member firms of the association. Finding out what the various enterprises in the membership can offer, plus networking within all these concerns, is part of what makes the IVCA a vital connection for everyone. The newest member to join the association is PEF Services LLC, a leading fund administrator for Private Equity funds.

The following is a Q&A profile with PEF Services LLC, which elaborates on their background and their anticipation for interacting with the IVCA.

New Member: PEF Services LLC

Representative: Anne Anquillare Co-Founder/CEO & Thomas McNeely, Vice President/Chicago Office

IVCA: What is a brief history and background of the PEF Services?

PEF Services LLC: PEF Services LLC is a leading fund administrator for private capital funds and their investors. Founded in 2002 by experienced managers, PEF Services LLC helps private capital firms and their investors transform their back office into a ‘Center of Excellence’ by seamlessly upgrading the quality, quantity, and timeliness of investor information. Our Center-of-Excellence approach means we build a plan that is unique to each firm and fund’s needs. Our designated LP Administration Solutions Group (LPAS) focuses solely on meeting the unique needs of Limited Partners investing in illiquid alternative assets.

We have an exceptional, decade-long track record delivering cost effective solutions to private capital funds and their investors of all types and sizes – including buyout, debt, distressed, fund of funds, mezzanine, real estate and venture.

IVCA: Why did the firm decide to join the Illinois Venture Capital Association?

PEF Services LLC: PEF Services LLC decided to join the IVCA for several reasons. First, we wanted to join the Venture Capital and Private Equity community serving the Illinois community, because of the hiring of our new colleague, Tom McNeely. We also wanted to get more involved locally, plus meet with and communicate with like-minded professionals.

In addition, we wanted to contribute leadership and knowledge to a frequently overlooked segment of the PE and VC industry, namely the ‘administrative side’ of running a private capital management firm. And finally, we wanted to be a trusted resource for those firms who need additional assistance in back office and administrative functions – such as accounting, financial reporting, compliance and technology.

IVCA: How do your services create advantages for a Private Equity fund? What specific administrative resources can unburden the complexity of PE funds?

PEF Services LLC: PEF Services LLC works as a complementary partner to the firm’s CFOs, CCOs, and/or COOs, in handling bookkeeping, financial reporting, investor communication and compliance matters, among its core offerings. This allows the firm’s professionals to spend more time on finding and growing value-creating investment opportunities. Also, while difficult for individual investment firms to build a state-of-the-art integrated tech platform, PEF Services LLC is constantly enhancing its tech platform for the benefit of all of its clients.

IVCA: Environmental, social and governance (ESG) data has become more and more important for investors. What expertise does your firm offer that expresses ESG data in explicit terms?

PEF Services LLC: Many middle market funds are impact funds, they just do not know it yet, and do not collect the data to prove it.  ESG is the data that demonstrates a fund’s investment impact, job growth, diversity in management and ownership, social awareness and related policies – much stronger in small companies than corporate America – plus interest in disruptive technologies or services, like clean tech. 

All these are normal features of lower and middle market investing. PEF Services LLC has been collecting data to show the positive impact of investing for SBICs [Small Business Investment Company] for over a decade. The Small Business Administration [SBA] has used the data we collect to demonstrate the impact of the SBIC program.  We have started to provide the same service for our non-SBIC funds so they can demonstrate their ‘impact’ to their investors and potential investors.

IVCA: On your website front page, you state that PEF Services goes through a 'rigorous audit' each and every year. What advantage does that give the services you offer for your potential customers?

PEF Services LLC: Every year, PEF Services LLC has an examination of its controls and processes conducted by RSM USA, or a similarly qualified audit firm.  The resulting report is called an SSAE 16, SOC1 – which stands for Service Organization Control Report. Think of it as an audit of our internal control procedures. So, in the same way an accounting firm conducts a financial audit of a public or private company, we engage an outside third-party firm to examine our controls.

This report is available to prospects or clients – and their investors and auditors – and we’re very proud of that. The significance is that as a trusted third-party provider to private capital firms, we make sure we adhere to the highest standards of professionalism, and our clients – with whom Limited Partners place their investment dollars – demonstrate by their use and affiliation with their vendors that they understand the significance of running a professionally-managed private capital firm.

Nowadays, there is far more to the business than simply making good investments and returning capital to Limited Partners. The old days of ‘trust us, we have this’ no longer apply. There are too many bad actors in play now, along with more aggressive LPs and their demand for greater transparency, plus government regulators and increased competition in the industry.

IVCA: What does PEF Services LLC hope to achieve in their interaction with the IVCA?

PEF Services LLC: Primarily, to provide knowledge and leadership in the area of private capital firm fund administration, to network with other Chicago and Illinois professionals, and also to have a few laughs along the way!

For more information regarding PEF Services LLC, click on PEFservices.com