According to a report from FTI Consulting, the outsourcing wave in real estate fund management actually began a decade ago, driven by fund managers' desire to focus on strategic functions and search for cost savings. Today's more savvy fund managers, however, are starting to realize true value from outsourcing, benefiting from third party administrators that understand real estate as well as they do, offer proven and scalable technology, and have loads of experience managing services to meet fund managers' expectations and requirements. Further, limited partners are coming to expect or even demand that fund managers/general partners engage a third party administrator.
So what, then, should a fund manager look for in an outsourcing partner? According to the 50+% fund managers who have outsourced at least one business function, the three most important factors are experience with funds similar to theirs, client service/relationship management and real estate knowledge and experience. In short, experience, service and knowledge trump price.
