In 2022, Passthrough made a bet that felt risky at the time: we built financial crime compliance directly into our investor onboarding platform. Not as a partner offering or as a separate product. As a unified workflow where GPs and their service providers can handle sub docs and KYC/AML requirements in the same system—backed by an in-house team of financial crime compliance experts—through the same investor experience.
Three years and hundreds of fund closings later, that bet is paying off. Here's what we've learned and why more fund managers are rejecting the "juggle multiple vendors" approach to investor onboarding.
The problem we kept hearing
Before 2022, we'd spent years building the fastest, most flexible fund subscription platform in private markets. Fund managers loved it. But they kept telling us about the same operational challenge: coordinating between separate vendors for sub docs and ever-evolving KYC/AML obligations.
The pattern was consistent across growth-stage funds and institutional firms alike. Someone would close a sub doc, then manually trigger a compliance workflow in a different system. Investors got confused about which platform to use for what. Data lived in two places. Status tracking required checking multiple dashboards. When something went wrong, it wasn't clear which vendor owned the problem.
Why we didn't partner
The obvious solution was to partner with an established KYC/AML service provider.
We chose differently. Here's why:
Investor onboarding and KYC/AML compliance are the same workflow. When an LP commits to a fund, they need to provide identity information, beneficial ownership details, source of funds documentation, and subscription agreement responses all at once. Splitting this across vendors creates artificial handoffs that annoy investors and slow closings.
Shared data infrastructure matters. The information investors provide for subscription agreements (legal entity names, jurisdiction of formation, ownership structures) covers most of what compliance reviews need. When these live in separate systems, you're either duplicating data entry or building complex integrations to sync information that should have been captured once.
Single vendor accountability changes everything. When onboarding and financial crime compliance live on different platforms, problems fall into gaps. Is the delay because the sub doc isn't complete? Or because the KYC review is pending? Fund managers shouldn't need to mediate between vendors to figure out why an investor can't close.
Expert oversight matters as much as technology. We aren’t just building software. We started hiring and training a team of financial crime compliance analysts who understand private fund structures, beneficial ownership complexity, and evolving regulatory requirements. This isn't a platform you manage yourself or outsource to a third party; it's technology plus expert oversight, delivered by a single vendor.
We believed fund managers deserved better. So we built it ourselves.
What 3 years taught us
Lesson 1: Investors care about completion, not your vendor stack.
When we launched unified workflows, investors could complete both sub docs and KYC/AML requirements in a single sitting. They didn't want to "finish the sub doc, then check your email for compliance instructions." They wanted to be done.
This matters during closing periods. Every additional step is another chance for investors to get distracted, delay, or drop off entirely. The difference between "complete everything in 20 minutes" and "complete the sub doc now, then wait for another email" is material to closing timelines.
Lesson 2: KYC/AML and subscription data validate each other.
We've caught countless discrepancies that separate systems would miss. An LP lists one legal entity name on their subscription agreement and a slightly different name on their KYC documentation. An investor claims qualified purchaser status but the supporting documentation doesn't match. Beneficial ownership structures that don't align with tax classifications.
When these live in the same platform, our review teams—both sub doc specialists and financial crime compliance analysts—can flag mismatches immediately. When they live in separate systems, these errors make it to closing, creating last-minute revision cycles and delayed capital calls.
Our compliance team brings specialized knowledge that software alone can't replicate. They understand the nuances of entity structures across jurisdictions, can spot beneficial ownership red flags that don't trigger automated rules, and know when investor documentation requires follow-up versus when it's technically complete but operationally insufficient.
Lesson 3: Fund administrators care about data completeness, not where it comes from.
Fund admins consistently tell us their biggest frustrations are incomplete and offline data. Some investors submit subscription documents. Others submit KYC/AML materials. Rarely does everyone submit everything, on time, in the right format.
Our unified approach delivers 100% data completeness because investors can't close until both workflows are complete. Fund admins get structured data and documentation from every investor, every time, in a single export or API integration. No manual follow-up. No offline documents. No gaps.
Lesson 4: Fund closings are choreography, not handoffs.
Here's what a typical fund closing actually looks like: legal counsel reviews executed sub doc, compliance specialists validate KYC/AML documentation, fund admins prepare for capital calls, and fund managers need to know which investors are ready to close and which are holding things up.
When these workflows live in separate systems, coordination becomes the GP's problem. "Counsel says the sub doc is clean, but did compliance finish their screening?" "The investor submitted something in the KYC system—did that satisfy the subscription agreement requirement or is it separate?" "We're ready to close on Friday—can someone check both platforms and tell me who's actually done?"
A unified platform eliminates this coordination tax. Everyone—counsel, compliance specialists, fund admins, internal teams—sees the same real-time status. Legal counsel can see that an investor's subscription is complete but KYC review is pending. Compliance specialists can reference subscription agreement responses while reviewing beneficial ownership. Fund managers have one dashboard showing actual closing readiness, not "probably ready if we assume the other system is updated."
This isn't about features. It's about the operational reality that fund closings require multiple parties working on interconnected tasks with dependencies. Partnerships create artificial silos that force someone—usually the GP—to be the glue between systems.
Lesson 5: AI reconciliation solves a problem partnerships create.
When fund managers switch platforms or providers, historical investor data often gets trapped or lost. This creates a painful choice: burden investors with redundant data collection, or accept incomplete documentation.
We added AI-powered reconciliation specifically for this problem. Our system can match existing KYC/AML documentation from any previous provider (including in-house programs or other vendors) against current regulatory standards, identifying gaps and reducing investor burden.
This capability is difficult to replicate through partnerships because it requires deep understanding of both subscription data structures and KYC/AML compliance requirements. Building it as a native feature means it works seamlessly, automatically, without coordination overhead.
Why we still believe in partnerships (for everything else)
We're not anti-partnership. Passthrough connects with dozens of platforms through our API: CRMs like Altvia and Salesforce, side letter platforms like Ontra, LP portals like Allvue and Dynamo. We believe fund managers should use best-of-breed technology for each function and connect them intelligently.
But investor onboarding and financial crime compliance is different. These workflows are so tightly coupled—sharing data, dependencies, and investor touchpoints—that splitting them across vendors creates more problems than it solves.
And when partnerships do try to combine onboarding and compliance, they typically separate technology from managed services, requiring fund managers to coordinate between a platform vendor and a services provider. That recreates the same multi-vendor coordination problem that prompted the partnership in the first place.
The test is simple: does separating these functions serve the fund manager better, or does it serve the vendors better?
For subscription documents and KYC/AML, the answer is clear.
What we're seeing now
The market is shifting. Fund managers increasingly expect unified onboarding and compliance workflows, not bolted-together solutions. Banks and broker-dealers are raising KYC/AML standards, making compliance a closing requirement rather than an afterthought. LPs are tired of disjointed experiences across platforms.
We're seeing this play out in prospect conversations. Three years ago, we had to explain why unified workflows mattered. Now fund managers ask if we offer it. The question isn't "why would you build this yourself" anymore. It's "why would you do it any other way?"
The competitive landscape is validating our approach
Recently, we've seen competitors explore partnerships to offer combined onboarding and compliance solutions. This validates what we've believed since 2022: the market needs unified workflows.
But here's what three years of operational experience taught us: announcements are easy, execution is hard. Building unified workflows means resolving hundreds of edge cases, designing investor workflows that operate across entity types and jurisdictions, creating review processes that coordinate multiple specialist teams, and maintaining data consistency across the board.
We've spent three years refining this. We've learned what works, what doesn't, and what investors actually need. That's not something partnerships can replicate through integration planning—it requires building, testing, and improving the actual operational workflow.
What's next
We're continuing to refine based on real-world feedback. Recent improvements include expanded source of funds and source of wealth documentation, enhanced beneficial ownership validation, and tighter coordination between our customer success and our in-house financial crime compliance teams.
We're also seeing demand for unified workflows extend beyond initial fund closings. Fund managers want the same streamlined experience for ongoing monitoring, capital calls, and investor profile updates. We're building for that future.
The core thesis hasn't changed: investor onboarding and financial crime compliance should live on the same platform, managed by the same vendor, with expert oversight included—not outsourced. Three years of operational data confirms this approach works better for fund managers, investors, and service providers.
We were early. We're still leading.
Ready to see what unified LP onboarding looks like? Connect with our team to discuss how Passthrough handles subscriptions and KYC/AML in a single workflow—no coordination overhead, no vendor finger-pointing, no investor confusion.
Your Privacy Choices