Cypress Creek seeks to partner with new and developing investment managers in underserved portions of the middle market across private equity buyouts, growth equity, infrastructure and natural resources. They closed their acquisition process on March 1, 2021.
“Overnight, we went from three people executing an acquisition to three people managing the day-to-day functions of a complex asset management firm,” Murray says.
Now a team of eight, Cypress Creek relies on RSM to take a holistic approach to their tax function, including serving as a sounding board on topics like tax planning and entity structuring, as well as implementation of best practices—all with the best technology.
“Our bandwidth was certainly stretched during federal tax and K-1 season, even with a two-person team,” Murray says, describing Cypress Creek’s initial in-house operations. “With all of our initiatives going on, the ability to leverage technology is instrumental in remaining a leading investment fund.”
Managing investor expectations
After achieving the quick turnaround initially needed due to the timing of the acquisition and 2021 Schedule K-1 filing deadlines, Cypress Creek’s other big challenge isn’t going away—managing the expectations and deliverables of 8,000 investors. Murray demanded of his tax technology software the same he does of all systems he implements: Make sure the insight it provides is used across the firm.
That’s where PartnerSight® excels. It instantly generates K-1s for as many investors as you have, integrates with other technologies and delivers data in an easy-to-read dashboard so that the tax department can consistently create value for the organization.
When tax data is free from the black box where it has traditionally lived, it can be used for the benefit of the entire organization, says Jason Lunte, an RSM partner in Dallas. Lunte is leading the charge on Cypress Creek’s tax compliance work.
“Technology is really important given Cypress Creek’s size,” Lunte explains. “Any manual process is exponentially more painful when you have to do it 8,000 times. Manual processes have a high risk of error and slow down everything else you do.”
Innovating tax now and in the future
In 2022, Lunte and his team were able to onboard Cypress Creek onto the PartnerSight® investor portal which modernizes the distribution of tax documents in a secure, electronic format.
“We have over 8,000 investors who are high net worth individuals,” Murray explains. “On an annual basis, they have their own tax returns to file, and they need information from our K-1s to develop their investment strategy.” Murray adds that this is also more eco-friendly, which is important for environmentally conscious investors.
With the PartnerSight® investor portal, Cypress Creek has an end-to-end tax technology platform. Cypress Creek’s relationship with RSM for partnership tax services powered by PartnerSight® makes for happy investors— and continued growth. It doesn’t take a technology expert to see it.