New Firm to Manage Private Equity Technology

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A Dallas based company launched by an industry veteran to offer technology management services to US-based Private Equity firms.

Private Equity firms are becoming more complex to operate after the recent financial recovery. Faced with increased government regulations such as expected to be required by Dodd-Frank, a more organized and risk-averse LP community and a greater necessity to operate globally, PE firms of all sizes are reexamining their operations and technology. A need for capable individuals to manage this transformation is clear; yet, management fees aren’t expanding with these new demands. Hiring experienced technology managers still lags behind the priority to bring on investment and finance professionals.

Steven Boydstun, formerly Senior Vice President over technology at Neuberger Berman Alternatives and Lehman Brothers Private Equity, has an answer: Darktree Management, Inc.

Mr. Boydstun has launched Darktree Management, Inc. (http://www.darktreemanagement.com) after 20 years in the business and after a decade of managing technology at large global PE firms. Darktree is designed to supply part-time technology management services. “The need for Darktree became clear to me during the financial crisis of 2008 and its subsequent recovery. Being deeply involved in the Lehman Brother’s bankruptcy, spinning off and standing up a number of independent PE firms, and then working through the recovery, it was eye opening to see how many general IT firms hired to transition struggled with the unique asset class”, said Mr. Boydstun.

The Darktree model is simple: postpone hiring dedicated technology management in-house but start managing early. “Darktree likes to work with smaller firms to get their initial operations setup correctly under a technical strategy/road map. When firms grow, they engage Darktree on a project or fractional basis, to help select, implement, or manage systems and other outsourced service providers,” says Boydstun. “If you setup good management practices early, it’s easier to stay on track and manage your enterprise. And because fund LPA’s can be written to classify 3rd party technology expenses as direct fund expenses, hiring Darktree is often management fee neutral. Newer firms often have more opportunities to take advantage of these provisions.”

Most of Darktree’s current work is still expected to be with larger firms, selecting systems or doing project recovery, or with mid-size firms, struggling with new regulations. “With the new RIA/RIC requirements, we are seeing a lot of renewed interest by mid-sized PE firms in data transparency and IT controls.” said Boydstun.

Darktree’s management services currently include: Technology and Operations Planning, Program and Project Management, System or Outsourced Service Provider Selection, Vendor Management, Contract Negotiations, Project Recovery, Process and Procedures Documentation, Business Process Re-engineering (BPR), Recruiting, Staffing, and Fractional CTO. Future management services are planned which will cover the entire back-office and most of the middle office, making Darktree a one-stop-shop for PE firms of all sizes.

For more information, visit http://www.darktreemanagement.com, email steven(at)darktreemanagement(dot)com, or call +1.214.699.6428.

About Darktree Management, Inc.

Darktree Management, Inc. is an independent technology management services company, which works with a wide network of service providers and vendors on behalf of select customer Private Equity management companies.

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Steven Boydstun

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