Emerging fund managers are required to comply with strict operational, regulatory, and reporting standards in the fast-paced realm of alternative investments, often with limited funding. More than just efficiency is necessary to navigate this complexity; a partner who understands their unique challenges is essential as well.

To address this need, Essential Fund Services International (EFSI) was founded in 2017. EFSI offers services for hedge funds, private equity, real estate, and other sectors across various countries, utilizing a client-focused approach and extensive industry expertise. With nearly $10 billion in assets under management, the company provides customized fund administration solutions by integrating advanced technology, personalized service, and strategic partnerships.

In an exclusive conversation with Business Fortune, Anthony Mascia, Co-Founder and Managing Partner of EFSI, discussed how their client-centered strategy and strategic collaborations have driven their rapid growth. He also emphasized EFSI’s dedication to compliance, flexible service delivery, and the use of technology to improve the client experience. Below is an excerpt from the interview.

INTERVIEW HIGHLIGHTS

What inspired the creation of EFSI, and how has its founding vision propelled its success in the fund administration industry?

Emerging hedge fund managers are where EFSI began in 2017. Our goal wasn't to address a specific issue; rather, we saw an opportunity to better support smaller, emerging asset managers in growing and managing their businesses through a client-centric approach.

We continue to uphold this philosophy today, and we believe our approach has proven effective. Since our inception, our client retention rates have been nearly 100%, and a significant portion of our new business comes through referrals. This underscores the success of our client-focused strategy.

Can you outline the comprehensive suite of services EFSI provides to empower investment managers across diverse asset classes?

We primarily offer full-service fund administration, catering to asset managers who manage alternative investment funds across various assets and industries, including hedge funds, private equity, private debt, real estate, and venture capital. Our services are available for funds domiciled in the United States, the Cayman Islands, and the British Virgin Islands. 

Additionally, we provide fund administration services to family offices and independent financial sponsors who invest directly rather than through a pooled investment fund. 

Beyond our main services, we also offer Management Company accounting and shadow administration, which can be provided as standalone services. Lastly, we provide capital introduction services through our involvement in the uncorrelated events franchise, although this offering is considered indirect and is delivered via that partnership.

The Paxus platform is a cornerstone of EFSI’s service delivery. How does its advanced allocation engine and flexible reporting capabilities enhance transparency and provide customized insights that empower clients and their investors?

Paxus is a single, fully integrated system for fund administrators, and they are constantly innovating to ensure that the requirements of both EFSI’s clients and us are met – or exceeded. It accommodates all major fund structures and asset classes and offers multiple accounting and tax method options with good security. Their responsiveness is excellent, and it is a key foundation of our business.

Maintaining SOC 1 compliance is critical in fund administration. How does EFSI seamlessly integrate rigorous compliance standards with cost-effective solutions to deliver exceptional value without compromising quality?

This question suggests a trade-off, which I do not believe exists. These processes are not mutually dependent. Our commitment to SOC 1 compliance is unwavering; it is a foundational pillar of our business. My business partner and co-founder, Joe Levato, manages EFSI’s operations and is responsible for implementing best-in-class compliance processes. I oversee the front office, and we have established a corporate structure in which responsibilities are clearly defined. We see this as a validation of the co-founder model and, as I mentioned, this structure leads us to conclude that there is no trade-off involved.

EFSI’s capital introduction program is a unique offering. Can you describe how EFSI leverages its industry expertise and network to strategically connect alternative investment managers with institutional investors, high-net-worth individuals, and other key stakeholders?

EFSI’s capital introduction program is supported by our strategic partnership with the Uncorrelated Events franchise, which operates in Miami, New York, Beverly Hills, and Puerto Rico. Since launching our business, we have been connecting managers and allocators, but until 2024, this process was less structured and more informal. It has always been part of our plan to establish a formalized structure, and when the team at Uncorrelated reached out, it quickly became evident that partnering with an events franchise was an effective way to achieve this goal.

With $5.5 billion in assets under administration, EFSI has achieved remarkable growth. What ambitious strategies and initiatives are in place to expand this footprint, both domestically and globally, in the coming years?

Our Assets Under Administration (AUA) are now close to $10 billion, up from approximately $8 billion at the end of 2023. This increase of around $1.5 billion over the past 18 months can be attributed to two main factors.

First and foremost is our customer-centric approach. This doesn’t mean we communicate with our clients every day; rather, it means we provide them with what they need when they need it. While we maintain a consistent service offering for all our clients—whether they are hedge funds, private equity funds, private credit funds, family offices, or management companies—some clients prefer a lighter touch, while others appreciate more regular engagement. We believe that fund administration is not a “one size fits all” service.

The second factor contributing to our growth is the implementation of a more defined audience development and lead generation program. This program started at the beginning of 2023 with a monthly newsletter and has since expanded to include the Uncorrelated events franchise. While we had always planned to focus on this aspect of our growth strategy, the COVID-19 lockdowns delayed our progress. Now that events have returned—stronger than ever, it seems—we have established an integrated marketing strategy that supports our growth.

Looking to the future, what exciting new services, technological innovations, or strategic enhancements is EFSI developing that will captivate clients and redefine the standards of excellence in fund administration?

Currently, there are no specific upcoming innovations to announce. However, we are pleased to work with our primary supplier, Paxus, who is at the forefront of fund administration technology. We have partnered with them since our inception, and they continuously roll out new features and enhancements to their services. At this time, we have no plans to change our supplier.

We stay informed about complementary technologies through our network, and we will explore any new opportunities as they arise. Our commitment to improving our product relies heavily on technology, as it directly enhances the customer experience. We believe we are well integrated into the broader technology ecosystem, especially regarding cybersecurity.

While we do not have a formal innovation strategy, we have structured our business to quickly adopt useful innovations as they emerge. When it comes to redefining the standards of excellence in fund administration, we subscribe to a well-known football philosophy: “one play at a time.” We believe that arriving at work each day with a focus on doing our best is crucial. Hard work is the primary driver of success in any field, so we take it one day at a time. By concentrating on the present, we believe we are positioning ourselves for medium-term success.

Trailblazing Minds Redefining the Future of Fund Services

Anthony D. Mascia | Co-Founder & Managing Member of EFSI

Mr. Mascia has more than two decades of experience in the alternative investment and private funds industry and is responsible for EFSI’s front office, which includes account management, business development, customer service, marketing and sales.

Before establishing EFSI with Mr. Levato, Mr. Mascia consulted for various firms in the alternative investment industry and built a guaranteed independent brokerage firm focused on investing in alternative strategies through an affiliation with MF Global between 2008 and 2011.

Before joining MF Global, he began his professional career in 1999 as a trader and member of the New York Board of Trade, spending almost a decade building a commodity brokerage book.

Mr. Mascia was born and raised in New York and is a graduate of Fordham University, Fordham College at Rose Hill. He resides in Westchester County, New York, with his wife and children, where he is an avid winemaker and musician.

Joseph A. Levato | Co-Founder & Managing Member of EFSI

Mr. Levato has over twenty years of experience in the fund administration industry and is responsible for all aspects of EFSI's operations.

Before establishing EFSI with Mr. Mascia, Mr. Levato spent seven years with Advanced Fund Administration (“AFA”), where he served as Head of North America Operations & Chief Financial Officer, with responsibility for building out the firm’s United States fund administration business. Mr. Levato also led the firm’s business development and acquisition efforts during his tenure with AFA, significantly increasing the firm’s client base.

Before joining AFA, Mr. Levato served as Global Chief Financial Officer for Citigroup’s Hedge Fund and Private Equity Fund Services (formerly BISYS Alternative Investment Services) business from 2005 - 2010, with responsibility for North American, European, Asian, and Caribbean operations, and was a member of the Executive Management Committee. 

Before joining Citigroup, Mr. Levato was Vice President, Planning & Analysis for Marsh McLennan, specializing in strategic planning and analysis for the Marsh Insurance Brokerage business.

Mr. Levato was born and raised in New Jersey and received his undergraduate degree from Miami University in Oxford, OH, and later earned his Master’s degree from Fordham University, New York. He is an avid golfer and currently resides in New Jersey with his wife and children.

“We believe that fund administration is not a 'one size fits all' service. Our customer-centric approach doesn’t mean we communicate with our clients every day; rather, it means we provide them with what they need when they need it.”