Turning Complexity Into Competitive Advantage
A Q&A with Justin Nadler, President of HSFT, on data, scalability, investor expectations, and the changing role of fund administration for private equity.
Private equity firms are managing more funds, strategies, jurisdictions, and liquidity structures, while investors expect faster access to clearer, more consistent information. The result is an operating environment in which complexity can compound quickly and confidence in data has become central to decision-making. Justin Nadler, President of HS Financial Technologies, discusses the capabilities alternative asset managers need to improve operational efficiency, scale with control, strengthen the investor experience, and turn operational information into a strategic asset.
What does an operating model built for scale look like in private equity today?
Justin Nadler: An operating model built for scale is anchored by trusted data, scalable processes, and real-time visibility. Manual workflows, disconnected spreadsheets, and siloed views of individual funds become harder to sustain as firms add flagship funds, co-investments, continuation vehicles, or private credit strategies. Managers increasingly need a consolidated view of investments across funds. A connected operating model provides that visibility, gives leadership greater confidence in the numbers, and allows teams to spend less time reconciling information and more time making decisions. Just as importantly, it creates infrastructure that can grow with the business.
Where do firms most often underestimate operational complexity?
Justin Nadler: The greatest risk is not usually a single new fund, strategy, or jurisdiction, but rather the cumulative effect of several changes happening at once. Reporting requirements multiply, investor expectations rise, regulatory obligations expand, and data typically becomes more fragmented. The challenge is coordinating that growth without weakening accuracy, consistency, or control. To address that challenge, administrators require an operating model built around a single source of truth and a robust, tax-compliant general ledger, enabling consistent reporting regardless of the complexity of the structure or unique needs of the client.
Which capabilities should a CFO prioritize when building the next generation operating model?
Justin Nadler: Three capabilities stand out: a single trusted source of data, scalable workflows that reduce manual intervention, and timely information that supports decision-making. A trusted partner is equally important. As the CFO’s remit expands to running the broader business, the right partner can take on the operational heavy lift of administering the funds. A strong operating foundation supports growth, risk management, fundraising, and investor communication by making information more reliable, accessible, and useful.
What does “trusted transparency” mean in practice?
Justin Nadler: Trusted transparency isn’t just more data. It’s information that’s accurate, timely, consistent, and easy to understand. For CFOs, that means having confidence that the information used for all strategic decision-making is drawn from the same source. For investors, it’s confidence in how fees are allocated, valuations are determined, and liquidity events affect their investment. Transparency also extends beyond the finance function. Trusted data should feed enterprise data warehouses and provide investment teams with information that integrates into front-office performance and risk metrics. A common data foundation allows firms to deliver standardized reporting and bespoke outputs, including reports shaped by individual LP and side-letter requirements, without creating unnecessary operational strain.
How can HSFT help firms improve the investor experience without adding unsustainable complexity?
Justin Nadler: The strongest investor experiences combine proactive communication, responsive service, and easy access to information. Fully reconciled data helps ensure accurate, consistent output across investor communications. Technology improves delivery, while the service model provides context and accountability. The objective is not to create more work or circulate more documents, but to make reliable information easier to access and understand. This is the model we’ve built at HSFT, bringing together technology, data, and service, all designed to enable an improved investor experience without adding complexity.
How can managers build greater confidence in their data and reporting infrastructure?
Justin Nadler: Confidence begins by reducing disconnected systems and manual handoffs. Firms need clear ownership of data, disciplined governance, well-designed workflows, and automation where it can improve consistency. A true single source of truth ensures people across the organization are making decisions from the same information. Achieving that requires more than robust technology; it depends on aligning systems, processes, accountability, and a shared understanding of business requirements so that data is reconciled, reliable, and trusted from the start.
As we consider the role of technology in reducing complexity, where can AI and automation add value, and where does human expertise remain essential?
Justin Nadler: Automation is well suited to repetitive, rules-based activity such as data collection, workflow management, reconciliations, and routine reporting. AI can also support data quality and accelerate analysis. Those benefits depend on clear governance, strong controls, and human oversight. Experienced professionals remain essential where judgment, context, and relationships matter. Technology should strengthen decision-making, not remove accountability.
What capabilities are required to support increasingly complex liquidity events?
Justin Nadler: Continuation vehicles, secondaries, and NAV financing demand precision, transparency, and coordination. Managers need timely and accurate data, robust valuation support, and the ability to manage complex capital flows efficiently. These events also raise expectations of fund administration partners, which must bring deeper expertise, flexible workflows, and stronger reporting capabilities. As complex liquidity transactions become more embedded in private markets, operational readiness can help firms execute effectively and maintain investor confidence.
How should firms think about outsourcing and co-sourcing as they scale?
Justin Nadler: The decision is no longer defined solely by cost reduction. The more strategic question is how to create operating leverage without proportionally increasing internal resources. The right model can provide specialized expertise, scalable capacity, and technology investment that may be difficult to replicate internally. It shouldn’t require firms to relinquish control. Instead, it should allow internal teams to focus on higher-value priorities while maintaining confidence in the underlying operations and data.
What distinguishes a strategic fund administration partner from a transaction processor?
Justin Nadler: The difference is the ability to create operational confidence. A strategic partner acts as an extension of the client’s back office. Rather than simply booking transactions based on instructions, it questions and validates activity to support accuracy and understanding. That discipline improves the experience from transaction processing through financial statement preparation. Combined with experienced people, disciplined processes, and modern technology, this approach helps managers navigate complexity, manage risk, and scale with greater control.
From Operational Complexity to Decision Confidence
As alternative asset managers expand, the operating model must do more than keep pace. Building a trusted foundation for reporting, investor service, capital activity, and strategic decision-making becomes a competitive differentiator. The traditional model often shadowed the manager’s books and records, accepted valuations without sufficient challenge, played a limited role in capital events, and worked largely in arrears. HSFT has changed that model, with experienced teams that maintain the books and records, review valuations for consistency, calculate and distribute capital notices, and keep cash and transactions current to support reliable intra-quarter reporting. HSFT’s team-based approach enables work on NAVs, capital activity, and allocations to progress concurrently.
By connecting data, workflows, technology, and expertise, firms can absorb complexity without transferring it to internal teams or investors, turning fund administration from a processing function into a source of operating leverage and confidence.