AFTAs 2016: Most Cutting-Edge IT Initiative: Buy Side—Blackstone

This year, Blackstone is back in the winners’ circle in the most cutting-edge IT initiative category, thanks to its impressive Niagara platform, a configurable waterfall-calculation system and reporting suite. According to Blackstone, in the world of alternative asset drawdown funds, the calculation of returns “waterfalls”—the process by which investors’ returns are calculated—is complex and difficult to systematize. It is therefore not surprising that many firms still use Microsoft Excel to manage this process.

Blackstone identified the risk and inefficiencies associated with the Excel approach, and several years ago embarked on creating a fully configurable waterfall calculation system and reporting suite. Web-based Niagara—built using ASP.NET MVC, C#, WCF, Redis and SQL Server and based on a foundational calculation framework enabling developers to configure new calculation data points—was developed in-house to maximize data standardization, providing an end-to-end accounting workflow supporting efficiencies for Blackstone’s back-office operations. It supports a range of asset classes including private equity, real estate, credit, hedge funds and mixed-class alternative assets.

Beyond performing waterfall calculations, Niagara offers a built-in reporting platform for running ad hoc queries and generating reports such as quarterly capital account statements and contribution/distribution schedule notices for the firm’s limited partners.

It also supports quarterly close of books and records functions, as well as general partner carry reporting. Niagara offers interfaces for entering transactional data for more than 25 transaction types, uploading Excel templates for ingestion of transactional data, and allows for a range of account allocation rules.

It also features modules supporting fee calculations and scenario analysis, while integrating with other systems such as Blackstone’s Master Data Management and Investor Portal, as well as third-party applications like Investran (part of FIS Global), iLevel and Oracle. 

This year, Blackstone is back in the winners’ circle in the most cutting-edge IT initiative category, thanks to its impressive Niagara platform, a configurable waterfall-calculation system and reporting suite.

Niagara requires users to enter transactional activities (commitments, investments, capital calls, reserves, leverage, etc.) and then allocates these cash flows down to investors, legal entities and vehicle combinations. These cash flows are utilized in waterfall events such as income, disposition and hypothetical liquidations for calculating amounts such as capital returned, fees realized and net gain. It also calculates fund hurdle targets such as preferred return, catch-up and full promote, cumulative carry paid to general partners, losses recouped, and other data points.