Helping 4Pines Lead the Conversation on Co-Sourcing in Fund Administration

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Gale Strategies

December 20, 2023 • 5 min read

How we worked with a leading firm to own a key industry conversation.

Fund administrators help the world’s private equity, venture capital, and alternative investment firms handle the accounting, reporting, and operations for the $23 trillion invested in private markets today. One in particular, 4Pines Fund Services, is directing the conversation around the pivotal issue of co-sourcing: an industry term for digitizing fund operations.

4Pines came to us with a vision of tapping into co-sourcing to help fund managers navigate tougher conditions and more disruption. We helped realize that goal through a methodical approach that started with open questions and conversations, moved to LinkedIn and press releases, and then evolved to generating stand-alone content and making media connections. We believe it’s an iterative process to lean into an idea that some may perceive “risky.” Today, we continue to work with 4Pines to hone their messaging on co-sourcing even further.

Why does co-sourcing matter? According to EY, 95 percent of private companies will consider outsourcing or co-sourcing tax and finance activities over the next two years. This means investment firms will increasingly need to decide whether to manage financial data through SaaS applications with the help of professional service firms or hire service providers that bundle that software into their engagements. General partners, or GPs, at investment firms that opt for co-sourcing will retain direct control and gain the benefits of collaborating with tech-savvy fund administration firms that will use the firm’s SaaS systems on their behalf.

Most incumbent fund administration firms are nervous about giving GPs direct access to software – perhaps justifiably. As 4Pines’ CEO and Co-founder Mike Trinkaus has pointed out, “When replacing a fund admin is as easy to accomplish technologically as turning off a license and turning on a new one, fund admins are much more motivated to perform at their best.”

Getting started

When we began to work with 4Pines, co-sourcing was not a widely used term in the industry, though it was a known approach – and, to some, a threat.

The 4Pines team had already seized on the unique, but technologically inevitable, model of fund administration that co-sourcing represents. They provide the most flexible solution for fund managers who want to outsource and gain the benefits of technology but also avoid the problems that arise when relocating their data to new service providers. With this approach, 4Pines works within their client’s platform but the client retains the license to the software and, therefore, continues to directly control their data.

This was not just a new approach. It was also one that others were shying away from – making 4Pines stand out all the more for leaning into it. But they had to tread carefully, introducing their capabilities while making it clear that they understood the many concerns of getting this shift right. Their co-founders, two of whom are the former CFOs of Portfolio Advisors and Commonfund, made this concern very clear to us. We needed to share a new idea, but to do so through a methodical approach that built on itself over time.

The process

When 4Pines opted to use technology developed by another client of ours, we wrote a press release and a series of LinkedIn posts about the new partnership. Though 4Pines’ leaders had previously been concerned that traditional marketing might alienate members of the finite and close-knit private capital community, they noticed how members of the ecosystem were responding to thoughtful LinkedIn marketing and wanted to try it themselves.

Social campaigns require diversified content that we worked with 4Pines to create, including press releases, webcasts, white papers, and other collateral. Mike Trinkaus wrote a call-to-arms on co-sourcing for Private Funds CFO. A sequence of four webcasts in 2023 featured Bob Chowaniec sharing how GPs can cross the co-sourcing chasm, James Rulli of Old City on the investor relations side of firm operations, prominent CFO thought leader Joshua Cherry-Seto joined, and James DiCostanzo of Allvue Systems. The series garnered press coverage and wider distribution on Spotify, Amazon, and Apple.

These efforts built buzz, audiences, and communities:

  • Engagement-per-post in terms of shares, reactions, comments, and clicks increased from 33 to 53
  • LinkedIn impressions increased, from 46,000 in 2022 to 85,000 through early November 2023
  • A browser search for “co-sourcing” and “fund administration” yields 42 results today (compared to five, a decade ago), with 4Pines’ media coverage and marketing collateral occupying most of the top results. No other fund administrator exhibits this degree of search authority for co-sourcing

Our success with LinkedIn showed we could help 4Pines reach target customers while building up impressions in the markets where 4Pines wanted to find larger clients: GPs overseeing more than $1 billion in assets.

Honing in

An A/B test with prospective clients further proved that 4Pines, backed by months of marketing and thought leadership efforts to explain co-sourcing’s benefits and 4Pines’ unique positioning on it, was indeed hitting home with clients. We sent out two sets of emails – one that mentioned co-sourcing and one that mentioned only outsourcing. The test showed that recipients opened and clicked on links in the co-sourcing emails 16 percent more frequently than those that only referenced outsourcing.

The A/B test was the impetus for the Definitive Guide to Co-Sourcing, a comprehensive document that explains co-sourcing to prospective clients and provides 4Pines with a foundation and roadmap for sales, marketing, social media, public relations, and other communications. The guide is now inspiring a new series of LinkedIn posts that feature new bylines, webcasts, and other content and, more importantly, is spurring more conversations with peers and prospects in the industry.

What’s next

4Pines came to us with a novel idea, and they weren’t scared to say something others wouldn’t or couldn’t. We worked with them to determine how to grow proven buy-in around it. Through intentional, clear ideas that built on themselves over time, we helped them reach the position they’re in today: the voice dominating the increasingly robust conversation on co-sourcing in private capital.

Want to learn more? Are you facing a similar challenge in your industry? We’d love to hear from you.

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