Private fund investor onboarding: Embracing the power of digitisation

Digital investor onboarding for private funds is the process of replacing paper-based forms, manual KYC checks, and email-based document collection with a single digital platform that automates the onboarding journey end-to-end. For private fund managers and fund administrators, digitising onboarding streamlines operations, reduces time-to-investment, eliminates manual errors, and enables scalable growth without proportional increases in operational headcount.

As investor demand for alternative investments rises, so too do investor expectations. In a world that is increasingly moving online, how you onboard investors can make or break your firm’s growth.

Research from Bain & Company suggests that by 2032, private assets will reach up to $65 trillion, growing at more than twice the rate of public assets. This growth is driven by an increase in allocations to private equity and private debt, as well as rising demand from private wealth channels. Such expansion presents a significant opportunity for expedited capital raising, but also raises several key challenges.

Historically, private market funds have been managed using manual processes such as spreadsheets and wet ink documents. While this was an efficient way of dealing with a fund that had less than 50 investors, private market funds today might attract 500 investors or more. Managing an increasing number of investors creates complexities and leads to delays that only digitisation and automation can overcome.

One key area where private fund management creates increasing complexity with an increasing number of investors is investor onboarding. This is the first step in the investment journey; getting it right is crucial to providing a market-leading service.

Why manual onboarding is hindering private market funds

Private banks, institutional investors, and fund administrators grapple with outdated systems, paper forms, and fragmented data collection methods when onboarding investors. Such inefficiencies can cause major delays in KYC and AML checks, creating compliance risks and obstructing your firm's ability to scale its operations.

Sustained expansion compounds inefficiencies as private markets are opened up to more investors and previously untapped jurisdictions begin to see new growth. Regulators are supporting this growth by making private funds accessible to a wider range of investors in the private wealth sector. For example, the revised ELTIF 2.0 (European Long-Term Investment Fund), which has applied since 10 January 2024, removed the €10,000 minimum and 10% portfolio cap for retail investors with portfolios under €500,000

A 2024 report from Preqin forecasts private equity and private debt to grow at annual rates of more than 12% until 2029, with a push from private wealth spearheading this expansion. With this predicted influx, manual investor onboarding could act as a bottleneck, reducing fundraising opportunities and slowing investor access.

The role of investor onboarding technology in streamlining success

Digitising the investor onboarding process offers clear benefits for all actors in the value chain:

• Increased efficiency: Digital platforms streamline data collection, KYC/AML checks, and compliance. Automation removes the need for paper-based forms and repetitive tasks, ensuring faster turnaround times for both investors and fund managers.
• Reduced risk: Automated compliance processes reduce the risk of human error, helping teams apply their KYC policies consistently and evidence every check.
• Adaptability: As regulations evolve across different markets and jurisdictions, digital platforms provide the flexibility to adapt. Configurable forms and policies allow fund managers to easily meet new requirements without overhauling their processes.
• Enhanced scalability: For firms aiming to expand their investor base, digital onboarding allows for seamless scaling. A well-designed digital solution can handle the onboarding of a larger volume of investors, without sacrificing accuracy or speed. Expanding into new markets becomes easier as platforms can be tailored to accommodate the specific regulatory and operational needs of different jurisdictions.
• Improved investor experience: A user-friendly, digital onboarding process enhances the investor experience, reducing friction and delays. As alternative investments open up to private wealth channels, ease of onboarding will become a key competitive differentiator.

How our private market funds platform streamlines onboarding

At Goji, we offer a comprehensive digital solution for private market funds that addresses key challenges head-on. Our platform delivers a fully digitised, end-to-end investment journey, including KYC/AML compliance, subscriptions, settlement, and reporting. This seamless solution not only accelerates investor onboarding but also supports capital raising.

Here’s how our solution makes a difference:

• Configurable forms and tailored KYC: Onboarding forms can be customised based on jurisdiction or entity type, ensuring that all necessary information is captured accurately and stored for reuse. KYC policies can be tailored to meet the fund manager’s specific needs, offering flexibility and precision.
• Reusable information: Collected investor data is securely stored and can be reused, speeding up future compliance checks and general pre-population of future forms. This feature reduces repetitive tasks and enhances operational efficiency.

• Connected data and system integration: Goji’s configurable connectivity layer enables clients to connect the platform with their existing systems, sharing investor, subscription, investment and transaction data across their technology stack. This keeps data connected across the operating model, reducing manual re-entry and the risk of errors.
• Corporate structures and associated entities: The platform provides full transparency by allowing administrators to visualise corporate structures and simply associate documents to a particular entity.
  
  
• Secure portal and centralised repository: Investors can access a secure portal to track onboarding status, upload documents, and monitor their KYC progress. Administrators can easily search a centralised repository through the admin portal to locate investor profiles, track document expiration dates, and issue updates.
• Customisable workflows and automated requests: Workflows can be tailored to align with existing processes. Automated document requests are triggered inline with KYC policies and other compliance checks, providing clarity and visibility for both administrators and investors regarding required documents and next steps.
  
  
  

• Enhanced security: Access to a secure portal ensures a high level of data protection with digital audit trails, fine-grained controls over user access.
• Compliance monitoring and screening: The platform tracks document expiry and flags when supporting evidence needs to be refreshed, helping administrators keep investor records up to date. Integration with World-Check enables teams to create or link screening cases, view screening alerts and support ongoing monitoring within their compliance workflow, reducing duplicate data entry and bringing document and screening information together.

Ed Slocombe, Goji's Chief Product Officer, says: “In a market where speed and compliance are critical, the ability to reuse investor data and automate workflows significantly reduces the operational burden, allowing our clients to scale effectively.”

As part of the Euroclear group, we can offer our clients access to a global network of over 3,000 distributors, unlocking enhanced scalability. This connectivity creates more opportunities for capital raising and ensures a faster go to market for new fund launches, particularly for firms looking to expand their presence

How can we help you?

Our platform is designed to meet the evolving needs of different stakeholders:

• Fund administrators enjoy centralised data management and automated monitoring, which reduces operational overhead and compliance risk, enabling them to focus on high-value activities and client service.
• Asset managers can accelerate fundraising and focus on strategic initiatives by simplifying onboarding and compliance, therefore unlocking new capital-raising opportunities and expanding their investor base.
• Distributors can offer their clients access to a broader range of private market funds, enhancing portfolio diversification and expanding their market presence.

Our technology is not just about digitisation; it’s about transforming how private market funds operate in a rapidly evolving financial landscape. By eliminating manual processes, this platform not only simplifies investor onboarding but also strengthens relationship-building across the entire private market value chain.

In an increasingly competitive landscape, the future of investor onboarding is clear: digitisation is the key to success.

To learn more about the Goji platform or request a demo, submit a contact form.