WFH shines spotlight on a secure portal for transactions

4 June 2020 - COVID-19 has impacted the most basic actions associated with investing in the alternatives sector: namely, if managers do not update their technology capabilities, they will have to physically print, sign, scan and email subscription forms, redemption requests and other fund documents while working from home (“WFH”).

The pandemic has highlighted how investments in the alternatives sector can diversify portfolios and protect against market downturns. Understandably, managers are continuing to explore the ability to attract subscriptions with minimal impact to investors.

But how can an investor instruct capital allocations or redeem while WFH without access to a printer/scanner? Just as importantly, what are the security risks associated with emailing sensitive financial information that could be repurposed by unrelated parties?

The short answer to the former question is, it is extremely difficult to complete these tasks without a fully digital user experience. The reality on the latter issue is there are grave implications to emailing sensitive data, which can be repurposed for fraudulent activity. From our vantage point, we only see a partial return-to-work model across organizations, thus requiring secure and remote/online solutions to resolve such critical business needs for the foreseeable future.

Prior to the mass move to a WFH environment, the majority of Citco’s clients embraced CitcoOne for investor and LP reporting. CitcoOne provides over 120,000 users with access to their Citco administered funds in a single sign-on and secure portal. Additionally, with the launch of CitcoConnect in late 2018, we enabled managers to offer a fully digitized investment process for their investors.

In this new environment, the industry will need to transform the initial subscription and capital commitment process into the digital space – completely removing paper from the process while simultaneously improving the quality of the information supplied by investors. Managers will need to gauge investor sentiment with live usage reporting on which potential investors are engaging with fund offering materials, and where investors stand in the multi-phased subscription process.

A tool which simplifies and automates the management of prospective investors and placement of initial investments, using electronic document execution will be critical to underpin this digital transformation. The CitcoConnect platform provides managers with a virtual data room that is simple to set-up and which makes information readily available to interested parties during fund launches, closings, side letter document management and ongoing reporting. Automatic e-mail notifications, user activity metrics, document security and watermarking helps managers focus more on a meaningful investor experience and less on administration. CitcoConnect is a secure portal for all communications, thus eliminating the complexity of dealing with a cumbersome array of emails, and all users are enrolled into Citco’s Security Program using a comprehensive, defense-in-depth strategy. This strategy includes security controls and processes aligned with industry standards to ensure that our clients’ data and personal privacy are protected against threats and unauthorized access. 

These solutions are designed specifically for the needs of alternative investment managers and are exclusively available to the entire CFS client community, alongside continuous enhancements based on user community demands. You can find out more here.

By Emer McGuckin, Managing Director, Head of Investor Relations, Citco (Canada) Inc.