Navigating operational complexity

14 July 2023 - Following the Citco group of companies’ (Citco) win at The Drawdown Awards 2023, named best ‘Fund Administration: Over $500bn (total assets under administration)’, Claudia Bertolino, Head of Private Equity and Private Credit, Citco Fund Services (USA) Inc., sat down with The Drawdown team to discuss Citco’s successes over the past year in the Private Markets space, how it differentiates itself from its competitors and ambitions going forward.

The Drawdown (TDD): What do you think made 2022 such an exceptional year for Citco?

Claudia Bertolino (CB): It proved that our strategy remains relevant and our solutions continue to meet clients’ unique challenges. We are known for focusing not just on the day-to-day servicing but also on our clients’ future challenges. We always look to add value and to eliminate anything that is taking up too much of our clients’ precious time.

There have been a number of unforeseen market events in recent years – the pandemic, the accelerated adoption of new technologies, high interest rates and a subsequent fundraising slowdown. They have led clients to look at costs, infrastructure and operational footprints. This has suited our approach perfectly, as we have been able to assist them with identifying transformative ways to innovate.

With GPs devoting a lot of time and resources to supporting investment teams, we can help ensure downstream procedures are in line with these efforts. It’s a very natural time to be asking strategic questions of your service providers, and at Citco we have great answers to those questions.

TDD: How has Citco invested in products and services to get ahead of its competitors?

CB: We aim to help clients navigate operational complexity, and technology plays a huge part in that. The launch of the Citco Collaboration Platform™ in late 2021 was very timely. It's a workflow tool that creates a digital journey for capital events, with GPs – and Citco – able to initiate, review and provide feedback, all on a secure platform. It has become a vital tool for our private equity and private credit clients.

I would also highlight Citco’s data services. I cannot stress enough the level of focus we have on data right now. It's not just about providing basic transaction-level data but facilitating really swift access to granular data across all our asset classes and service strategies. Our data services platform brings together data across our entire technology ecosystem to provide both curated datasets and raw data in a myriad of different formats.

TDD: The judges praised Citco for having scale yet still being responsive to smaller clients – how do you achieve that balance?

CB: It is so pleasing to get that feedback because we are keen to dispel any notion that we are exclusive to only large-scale clients. Our client strategy is the same across the board, for all shapes and sizes. We apply the exact same partnership approach. We lean on our global model and global processes, which give us speed and efficiency regardless of size.

In the private market space, it’s about identifying partners that facilitate a long-term growth trajectory. If smaller funds have the right pedigree, right performance and right culture, Citco wants to facilitate their growth and grow with them.

TDD: In an increasingly competitive fund administration space, how is Citco differentiating itself from competitors?

CB: Citco remains privately owned. If you want me to predict what the future looks like for Citco, it will still be our name on the door – and our name only. There is going to be continued consolidation in this increasingly competitive market but we have never used M&A as our growth strategy. I don’t know if we ever will adopt this approach but our current strategy is incredibly successful.

For GPs we don’t serve today, we tend to get a call when their current partners go through M&A activity with concerns – M&A costs a lot of time and energy to ensure all of the different work streams, technology and service team cultures are properly integrated – we, however, focus our budget instead on innovation, internal expertise and organic growth.

We are going to continue to enhance our products with our clients and grow with them to deliver the most streamlined, easy-to-use platform possible.