“We received overnight credibility and stability in terms of fund administration, and avoided the significant cost and learning curve associated with bringing in and building a team from scratch.”
Chris Clair, CFO, Resilience Capital
Resilience Capital is a Cleveland-based private equity firm with an exclusive focus on lower middle market companies. Founded in 2001, Resilience invests in manufacturing, value-added distribution and business services companies with a clear path to cash flow improvement. The firm targets businesses with $25 million to $250 million in revenues, and it has invested in 55 companies under 30 platforms in the past 15 years. Resilience manages more than $600 million for its multi-national investor base.
Resilience was in the process of raising capital for a new private equity fund when the partners realized that increased investor demands and regulatory requirements would exceed the capabilities of their in-house back office team without a significant investment in additional staff and training. “We felt it would help recruit investors if we had a professional back office and administrative organization,” said Chris Clair, CFO of Resilience. “Finding the right resources or hiring the right talent to perform best-in-class fund administration would have been time-consuming and difficult.” An enthusiastic referral from their financial advisor led Resilience executives to PEF Services.
The PEF Services Solution
Upon joining the Resilience team, PEF Services assumed responsibility for all of the accounting and financial reporting that was previously managed in-house. PEF prepares the books and records, financial statements, partner capital statements, and capital call and distribution notices. They also manage communications using PEF’s Investor Library, a secure portal where investors can view and download information about their Resilience funds. PEF helped streamline various procedures for Resilience, including automating the investor distribution wires process, by using a direct upload to the bank website instead of a manual process. They also monitor partnership agreements for Resilience to ensure compliance with their governing documents. When the firm brought on a new CFO to manage the overall finance function, PEF Services was ready. They delivered the financial data and infrastructure needed to ensure a smooth executive transition. “We received overnight credibility and stability in terms of fund administration, and avoided the significant cost and learning curve associated with bringing in and building a team from scratch,” said Clair. “It’s like turning on a switch.”
Today, PEF Services provides support for the firm’s four primary funds, and also plays a key administrative role in helping Resilience initiate new funds. “Launching a new fund is a challenge due to essentials like capital call requirements and multiple attorneys drawing up complex documentation that are beyond the capabilities of our in-house resources,” said Clair. “We don’t have the internal mechanisms to make it work without PEF.” Another vital benefit has been PEF’s ability to recommend best practices that Resilience should implement to provide information to investors without scrambling or missing deadlines by weeks. “PEF Services was able to take the best practices they use with other clients and apply it to our situation. They gave us some valuable guidance on how to improve our valuation method so we could deliver timelier, accurate financials to our investors,” said Clair. “They even give us feedback on what we’re doing better than other organizations.” Implementing those best practices paid off. Resilience has significantly improved in meeting deadlines, and their streamlined back office systems and processes helped successfully launch the latest fund. “We’ve improved so much over the past two years,” said Clair. “We couldn’t have done that as efficiently and cost-effectively without PEF.”