Cut to the chase
“Error reduction is the most valuable and important benefit. There’s zero room for error when it comes to investor accounting, reporting, distributions, and waterfalls,” said Stults. “Because the Juniper Square team is effectively integrated into our source of truth, they’re able to identify considerations and possible mistakes we would have made on our side. I’ve developed a high level of trust in them.”
“Juniper Square has allowed us to focus on the differentiated aspects of who we are and what we’re trying to do,” Stults added. “It’s enabled us to hit the ground running without having to over-invest in an internal organization that would otherwise be a drag on our profitability and focus. Relying on the Juniper Square team to get those things done has reduced our time spent on administrative tasks by 75%, and allows us to focus on our team’s areas of highest impact: either finding and diligencing investments or engaging with investors.”
“We have a relationship that can grow with us as fast or as slow as we need to grow. I don’t feel the pressure of having hired a team in-house that I need to now cover expenses by doing more, which is not a good place to be in as an investor,” Stults commented. “We could do no deals or we could do 10 deals over the next year. Under any range of outcomes, I’d be entirely confident in Juniper Square’s fund administration capability.”
Funds & JVs managed
Total asset value
Watchung Capital is a real estate investment manager based in New York that specializes in yield-oriented investments in for-rent residential, commercial and hospitality assets. Watchung draws on its connections in the technology side of the real estate space to identify innovative operating strategies to drive higher returns at the property level.
Managing Partner Tom Stults had worked with third-party fund administration providers at previous firms, and found it more convenient and cost-effective to partner than to build these capabilities in-house. When he founded Watchung, he knew they needed to find a fund administration partner that would create trust and transparency with investors.
“The more you can show you’re relying on a credible, vetted third party for things like tax accounting and fund administration versus handling that in-house, the more it provides comfort to investors,” said Stults. “It serves as an important set of checks and balances for our organization.”
Further, Watchung’s team was self-managing many spreadsheets to track everything from asset level flows to investor reporting and distributions. In addition to fund administration, they needed ways to improve back-office efficiency without sacrificing the ability to communicate with investors.
In searching for the right fund administration partner, Watchung had several requirements. First, they prioritized finding a group with commercial real estate experience. As Stults mentioned, “We needed to find a third-party administrator that was set up and capable of flexibly administrating a range of vehicles at various sizes.”
Stults also had a strong interest in finding a fund administrator that worked seamlessly with their internal processes and technology to deliver a better experience for investors. “We didn’t want to act as the intermediary between the software we’re using for investor relations management and an old school, traditional, non-tech-enabled fund administrator.”
These requirements enabled Watchung to significantly narrow the field of potential solution providers. Tom quickly found a level of sophistication that distinguished Juniper Square from the incumbents who worked primarily with traditionally structured funds. They were also impressed with Juniper Square’s team of accounting and investor services experts.
Our investors have been really impressed and pleased with our ability to provide a level of transparency and professionalism of reporting, handling of distributions, etc., that's effectively on par with the largest, most sophisticated managers out there.
“If we didn’t have Juniper Square’s integrated software and fund administration solution, the burden of information flow and communication would have landed on us,” said Stults. “We would have had to hire someone in-house to do it just so we could focus on our objective—finding and investing in good real estate.”
As a result of Juniper Square’s fund administration, Stults noted a big impact with investors, especially in the face of their changing needs.
Finally, Stults identified an important operational milestone that Watchung reached. “Since working with the Juniper Square team, our spreadsheets are gone. We’re working with a system and source of truth that’s high quality, highly accurate, and in the hands of the Juniper Square administration team—frankly, much more capable and well-positioned to manage funds effectively on behalf of us and our investors.”
Metrics as of 5/1/2022