AJ Capital expands and protects portfolio through outsourcing

Our client's need

AJ Capital, a large-scale international real estate investment manager, focuses on hospitality development and operations. They fund development activity through real estate funds that are marketed to institutional and family office investors. Since their first investment, they’ve diversified and expanded their portfolio immensely to fund event venues, hotels, mixed-use, housing and retail and develop strategic relationships with big name entertainment. While trying to keep up with their rapid growth, they were constrained by a lack of resources to perform day-to-day property accounting work, especially during the beginning of the COVID-19 pandemic. There was a larger need for their team to perform higher value activities to maintain their growth.

Baker Tilly's solution

Baker Tilly came into the mix after being referred by a longtime client. Baker Tilly was engaged to perform outsourced commercial real estate accounting services for a dozen of AJ Capital’s properties, which then doubled after much success. The team of Baker Tilly real estate specialists educated themselves on the client’s goals and the challenges faced, which largely included navigating the beginning of the pandemic as a hospitality firm. Taking the time to understand these key components allowed for a smooth transition of accounting work and let AJ Capital focus on expanding their portfolio.

After much success and high satisfaction, AJ Capital requested Baker Tilly bid on their outsourced fund administration work for their funds and joint ventures. Impressed with the team’s expertise and ability to reduce time of reporting, they awarded Baker Tilly the engagement. While continuing to gain knowledge on the firm’s procedures, Baker Tilly’s specialists noticed they needed to update their anti-money laundering practices. Upon acceptance of our services, Baker Tilly implemented guidelines to align with industry best practices to protect the client from money laundering.

Fast forward a couple of years and the engagement of outsourced entities has almost tripled in size and has expanded to include ERP system transitions and corporate level accounting functions.

Results achieved

AJ Capital now has a predictable third-party provider that grows with them and their portfolio. Baker Tilly’s team of real estate specialists consistently recommend best practices and provide feedback to enhance systems. After implementing a financial closing process where deadlines were consistently met, time to close on fund reporting reduced significantly. In addition, our client reduced their hiring risk through utilizing a third-party provider. With Baker Tilly focusing on their accounting function, the international investment manager was able to create efficiencies to extenuate their ventures and further their opportunities. Synergies have been created between the teams and AJ Capital now considers Baker Tilly an integral part of their team. We have become a trusted partner, a step beyond an outsourced engagement.

For more information on this topic, or to learn how Baker Tilly specialists can help, contact our team.