The role of the back office in private equity

In an investment business such as private equity, there are three parts; the front office, the middle office, and the back office. The front office is in charge of dealing with consumers and clients upfront, like having face-to-face meetings with clients, and other client-facing roles. The middle office is in charge of risk, credit, and strategic management. For employees in this sector, the back office is simply a trap everyone wants to get out of. 

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It’s a talk among employees that those who are working in the back office always dream of having a role in the front office. Front office roles have higher pay as these are revenue-generating, unlike the back office. However, all operations of an investment bank or a finance company will be impossible without the force of the back office. Although it doesn’t directly generate income, it provides crucial support and administration. 

The back office carries out functions like settlement, record maintenance, clearances, regulatory compliance, accounting, and IT services. The operations run by the front office depends highly on the back office. Its staff focus on designing the computer systems, handling the company finances, maintaining the databases, and seeking out new talent.

Jobs in the back office are as important as jobs in the front office and middle office. Its support is needed for two offices to run smoothly. It’s more concerned with internal efforts, unlike the front office, and is more distinct than those of the middle office. 

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Scott Tominaga is the Chief Operating Officer of PartnersAdmin LLC. He has almost two decades of experience in the hedge fund and financial services industry. His company was established in 2008 with the intent to provide quality, outsourced solution to the dynamic back office needs of alternative fund industry. To know more about Scott and PartnersAdmin LLC, click here.