Phoenix American and AIX partner to deliver straight-through processing for alternative investments

Phoenix American, a transfer agent and fund administration provider for alternative investments, and Alternative Investment Exchange (AIX), a digital platform built to improve processes for investing in alternatives, have partnered to provide a fully digital purchase process for client funds. 

The partnership will enable investors to purchase alternative investment products digitally using the AIX platform resulting in a complete and active investment record in the Phoenix American transfer agent system, STAR-XMS, with no manual intervention. 

“We’re working hard to improve the way business is done and grow the overall industry. Partnering with Phoenix American is a critical step toward that goal,” says AIX COO, Brad West.

The partnership between Phoenix American and AIX is a key step in advancing the entire alternative investment industry. A significant amount of attention is paid in the alternatives industry to the problem of investment subscriptions that arrive at the transfer agent ‘not in good order’ (NIGO). Minimising NIGOs by developing a purchase process that eliminates manual data input has been a long-term goal. While both firms believe that reducing NIGOs is essential, they agree that it will not, by itself, scale the alternatives industry. Full automation of the purchase process will. 

"Phoenix American has long been a supporter of technological advancements that reduce costs for sponsors and improve investor and rep adoption of alternative investments,” says Andrew Constantin, Senior Vice President, Operations for Phoenix American. “Our mission is to identify ways to reduce operational frictions while remaining agnostic. Leveraging the AIX platform is an important step for Phoenix American as we continue to embrace advancements in technology that push the industry forward."

Seamlessly moving data between the firms’ systems, without manual intervention, will fundamentally change the way business is done. With Phoenix American integrated with the AIX Platform, true front-to-back connectivity of pure data involving no paper will occur for the first time. Authentically connecting sponsors, advisors and wealth managers to create a mutual-fund-like experience enhances compliance, provides true efficiency and addresses an operational friction that has rate-limited growth in the alternatives industry. This authentic data connectivity is where both Phoenix American and AIX see the potential to grow the alternatives industry and create transformational change.

The first client of the new partnership is ARCTRUST Properties, sponsor of ARCTRUST, ARCTRUST III, and Capitol Opportunity Zone Fund, LP, programmes specialising in investments made through Protected Appreciation Vehicles for Real Estate (PAVRs).

The AIX Platform integration will also enable Phoenix American to create opportunities for advisers to participate in alternatives, providing a significant competitive edge. AIX’s technology was built to provide dynamic check points across the entire investment life-cycle, removing obstacles that advisers and wealth management home offices often encounter. Advisors will experience for the first time, a seamless experience of buying, owning, and selling alternatives for their clients. 

AIX COO Brad West adds: “We wanted to confront the objections and address the friction points that have rate-limited growth in this industry. We have committed ourselves to building the plumbing that will connect and benefit the entire industry, creating meaningful change and positive outcomes for each stakeholder we serve”.

Phoenix American, an innovator in the alternatives industry, welcomes the added efficiency of the AIX integration. The company’s STAR-XMS transfer agent and administration system, the most advanced administration system in alternatives, centralises and streamlines back-office functions and provides sales reporting capability to drive sales. The integration of STAR-XMS with the AIX platform, eliminating the need for manual entry of subscription information, further streamlines the Phoenix American back-office process.