Emily Roehl: Hello and welcome back to the GP Fund Solutions podcast. My name is Emily Roehl. I'm an operations controller on our management company team, and I'm joined today by Scott Brazee, Senior Director of Client Operations. Hey Scott, how are you doing?

Scott Brazee: I'm doing well. Thanks for the kind introduction, Emily.

ER: Awesome. Happy to have you here today. I wanted to give you a chance to give a little bit of your background before we get started.

SB: I started in the fund admin space back in 2005 at a small company that was doing fund administration as a favor to some high net worth clients. And fast forward started GP fund solutions in 2011, basically day one.

And I've been growing the management company business ever since.

ER: It's been great. I've been with the company for two years now, had prior fund administration experience similar to Scott at a different firm, just not as long been in, but been here for two years and I've loved every day working with Scott and our management company team.

So thanks for joining me today, Scott.

SB: I'm excited to talk about management companies.

Emily Roehl: So today we are going to be talking about emerging managers in the private equity space, what considerations they have when deciding to start a business, specifically start their operations, and how management company services at GP Fund Solutions can best assist and aid these new managers.

So Scott, wanted to kick things off and discuss what are the main and most important considerations that you see driving emerging managers business decisions when starting their operations?

Scott Brazee: That's a good question, Emily. I think one thing I would suggest to emerging managers. Is to stand up the back office like they're going to market to some large institutions and a lot of things that they're going to want to see are the fact that you're actually starting this process of setting up the back office.

You don't need everything done by day one, but it's a good idea to have a lot of these in progress. I think some of the areas I think they should focus on would be a compliance manual, even if they're not going to be registered from day one. Having that compliance manual is usually a good sign to investors that they're already starting to think about having a first class back office and, they can utilize templates that we can provide them, as well as there's a few vendors that we work with, and we can make those introductions and they can really help them get that compliance manual in a good spot. And not only for the current fund, but it sets them up for the future when they do want to register with the SEC.

ER: Some great points there. And yes, as you said, having that foundation, knowing that every day during those early stages, something new can get thrown at you or pop up, that's where we can help assist and make sure everything stays in order as you have those new requirements and things that you need to do.

Emily Roehl: And you brought up a good point about compliance and how important that is. What have you seen be some of the most important changes or whether it's with FinCEN and AML, what are the new things coming out that managers need to be aware of that you've seen?

Scott Brazee: Yeah, I think the one that's top of mind for everyone right now is the new FinCEN regulations that go into effect January 1st, 2026.

This really expands the idea of an AML program. It used to be something that firms would just check the box because banks are asking for that information. However, it's no longer optional. FinCEN rule basically says you need an AML program and they've done a good job outlining what they call seven pillars of what that program entails.

We've always offered one of those pillars, which is customer due diligence, which is really the investor onboarding and daily monitoring of AML and sanctions lists. But now they've gone a step further and, one of the big things is you have to designate an AML compliance officer, and you also need an independent audit of your AML policy.

And those are services that we will be rolling out to both. current clients and new clients.

ER: Very excited to see how that plays out this year and ahead of the January 1st, '26 new requirements. I think for our emerging managers, our services can take a great lift off their shoulders and make sure we have everything covered.

Emily Roehl: Now, when a new emerging manager is going to start their operations, when do you think is the best time, as they're bringing their business plan to fruition, that they start talking with and sign on with a fund administrator?

Scott Brazee: Yeah, I think as soon as they have formulated their marketing materials.

Like I said, the marketing meetings with potential investors usually revolves around standing up a back office. And those are things that we have experienced helping them with. Not only, the compliance manual, but also introducing them to different vendors such as banking relationships, potential payroll.

Insurance seems to be another big topic that institutional investors will ask during due diligence meetings. Things such as cyber security, which also a top of mind due to all the various hacks that have been going on.

ER: And I think too, from what I've seen with clients from day one, we're helping them set up with these vendors and establish these relationships.

A couple of managers I've worked with in the past, if they've say, set up their payroll while in conversation with us, or they did it directly and then they're like, “Oh, this would be so great. You guys are taking it on. I should have had you from the start set up our accounts.”

Scott Brazee: Developing that cadence early on, and that structure, I think, just makes the transactional part of the relationship just take off as and helps our clients grow. We're able to weed out vendors that maybe don't provide the value or the service. That we would want our clients to have I think, in addition to, the payroll providers, expense reporting is a big thing, and it's always like the last thing people want to deal with, coding, Amex or travel expenses, but having the right platform it makes it easier for both our users and for us on the back end to, process transactions, getting into the general ledger so we can provide quality financial statements to our clients.

Expense reporting, not on top of mind, but it definitely a large part of the transactions that happen during a month. So it's important to have the right provider.

ER: And it's nice to, as an employee, have your expense reporting. If coding is easy to do and then you can get your out of pocket submitted and paid on time, I think everyone's happy.

So definitely, like you said, Scott, an overlooked but important part that we make sure we get our clients set up right.

SB: Definitely a step up from an Excel spreadsheet for sure.

ER: For sure. What are some kinds of expenses that you specifically see managers need to be aware of? Or what are things that you think when starting a budget, someone might forget about that's something that you always want to make sure you're accounting for?

SB: Yeah, I think I mentioned it right in the beginning is, compliance vendor. The compliance manual can be daunting for someone who's never written one before. And I think You know, getting a resource like a compliance vendor is a good step for them. I think some others, having a tax provider for the manager is going to be an important step.

Not something they might not think of day 1 because it usually you don't need it until the year is closed. But that's an expense I've seen that might not be accounted for, from day 1. Is there anything particular you've seen Emily in your experience?

ER: I think in addition to tax and compliance, having an initial thought on how big you want your team to be, what your hiring plan looks like as you're determining your fund size and what investors are going to be contributing, it can help you plan how many people you can have on your team.

We do a great job helping you budget and make sure that as you want to bring on new hires that you have the funds to be able to do so and continue to grow your operations.

SB: Yeah, that's a good point. I think health insurance might not always be top of mind. That's usually one of the bigger expenses on the payroll side, and we help make those connections to vendors such as a PEO provider, which not only offers payroll, but also those health insurance benefits, which are very important to attract talent.

Emily Roehl: We have great, strong relationships with the right payroll providers and PEOs to get emerging managers set up and from the ground up, have a strong operations and we can take care of all that paperwork and everything that they need in the backend, which I think has helped.

As Scott mentioned, you want to make sure you have a tax relationship with an outside vendor, but we do also help provide filings. We'll do UBT, PTET, CRT, commercial rent tax filings with our clients. We'll help coordinate those actual tax filings and make sure that things are staying up to date and on time.

We work closely with our tax teams for our manager entities to make sure that year end tax books and any reporting is done. And then we also work with filing agents banking, setting up bank accounts, maintaining ledgers and monthly reporting and budgeting as well.

SB: Even though we're heavily involved in the transactional part of the business, I think another benefit of having GP Fund Solutions is we act like team members that are down the hall versus administrators.

So we're always there to answer questions, review complex transactions. And I think, another big thing that's coming down the line for not only the company, but for the management company team is finding new ways to report data. And we're a very data driven business. And finding ways to share that with our clients in an easy, modern efficient way is what we've been striving for as a company.

I'm excited to show different things to clients as we go down that road.

Emily Roehl: I know our management company team is a great and strong team within GPFS. And we have our fund reporting, data team, treasury, all different areas of the business. Say we have a manager who is thinking, “Do I keep operations internally? Or do I, as well as my fund work, bring that out to an admin?” Why do you think that we work best being part of the overall team and for our clients?

Scott Brazee: Yeah, that's a good point. There's definitely a lot of synergies when both the employees on admin and man co together. The biggest example I will share with clients is the 'due to manager' packages that go between us and the fund team. As is well known in industry, the fund calls money when they need it, and so there's a lot of times where the management company is paying invoices on behalf of the funds or other entities. And we craft a very efficient and easily digestible report that goes to the fund teams, before we send out an invoice to the funds and that really helps them in terms of their quarterly reporting to have all the information they need all the backup is right there versus having to go, to the client who's probably busy as well, and with investments and other year-end activities, just to have us do that for them is a big time saver.

ER: Definitely, and I think to add on to that as well, real time, quarterly, annually, our management company team and our fund reporting teams also, we've been making sure that we meet together, make sure can we improve any efficiencies on how we're delivering 'due to manager' reports or billings to the funds.

Making sure that when a fund team receives our 'due to manager', they're not, nobody wants to code things twice and have to translate from man co to fund. So I think we do a great job staying on top of how our clients want to see their books and see their records and that backup support. We have it easily available.

And, we're right down the hall from each other. So any fund team questions, treasury questions, we're all in one place. And I think we do a great job making sure that we're always reevaluating how can we better communicate and consolidate what we're doing for our clients.

SB: Yeah, it's fun, it's fun to watch emerging manager grow from, fund one, I think our first few clients we joined, they joined us when we were brand new and they started with fun one. And, some of them are on fund eight and nine right now. So it's just fun watching them grow as we grow as well.

ER: Yes, it's great. And the sky's the limit for both us and our clients, which is awesome.

Thanks, Scott. It's been great chatting with you today. Really appreciate your time. And for our listeners, we appreciate your time as well. So thank you for tuning in and we hope to have you back soon for the next episode of the GP Fund Solutions Podcast. Great.

SB: Thanks, Emily.