Why do GPs switch service providers?
It’s a simple question with complex, multifaceted answers. And one top of mind for every business development professional when trying to win over a new client or prevent an existing one from leaving.
At Preqin, we wanted to explore the topic in detail. So, we put together focus groups of GPs to directly ask them when and why they switch fund administrators, among other topics.
The answers we got back may align with your own views, with the need for more support as the firm grows, cost considerations, and LPs’ wants rounding out the top three responses. But it’s when we start digging beneath the headlines that some compelling insights begin to surface.
For instance, GPs don’t always take a 10- or even five-year view when selecting their service providers. Instead, they accumulate, for example, different fund administrators for different jobs in different jurisdictions, and then only look to consolidate after feeling the pain of coordinating work streams and reporting across multiple third-party vendors.
Timing is another theme that emerged. GPs told us that they value regularly hearing from service providers about their latest technology, client wins, or thought leadership. And even if a firm is not ready to make the switch now, it’s those service providers that prove their worth with a steady drip of market insights that earn a CFO’s attention once they are. It’s unsurprising then that law firms, auditors, fund administrators, and other service providers are significantly ramping up their marketing and business development efforts to earn that call.
It’s with this background in mind that we encourage readers of this report to consume our latest league table rankings. The lasting power of certain service providers atop our leaderboard rankings is a testament to not only their service offerings, but the brands and reputations they’ve cultivated to continue earning clients’ trust as GPs continuously shop for the right service provider at the right time.
This year’s report also offers some new views into who the biggest service providers are – an acknowledgement that there are more ways than one to rank market leaders. Beyond that, we encourage you to explore the key trends on fund administrators, placement agents, law firms, and prime brokers. I hope that you enjoy.