Factors to Consider When Selecting a Fund Administrator

Hiring a qualified and experienced fund administrator provides alternative investment fund managers with more than just peace of mind; it is a critical decision that affects your ability to raise institutional capital. Here are some helpful hints and tips for securing the best fund administrator for your situation.

Organization & Timing

Alternative investment funds like hedge funds and private equity funds need to pay close attention to the pre-launch phase of their onshore or offshore fund as well as the actual launch of new investment vehicles. In a typical pre-launch phase, a fund administrator will support the legal and advisory role needs of a fund manager client by clearly outlining the fees and investment parameters in the private placement memorandum.

The role of a fund administration firm also includes the managing of legal documents, subscription agreements and general coordination of paperwork to ensure that all new investment funds are ready to be deployed at a preset time or when an event triggers the launch.

Maintaining the Shareholder Register

An experienced fund administrator will understand the numerous entries that are needed to be made in a shareholder register including subscriptions, redemptions, transfer requests, and know-your-customer / anti-money laundering initiatives. It is the administrator’s role to ensure accuracy and transparency to ensure the fund manager is compliant with all relevant regulations.

Calculate Fund Value

You will need your fund administrator to independently verify the net asset value of the fund, something that requires a strong understanding of the trading strategy of the investment manager. Paying careful attention to daily trades and reconciling the account on an almost daily basis is only part of the job; fund administrators that employ the latest technology and work with leading data providers are ensuring their clients receive more accurate valuations, faster.

Prepare for Taxes

Fund administrators play a critical role in the preparation of tax documents. But fund administrators that routinely check for different deductions or advantages throughout the year enable fund managers to ensure that they won’t get hit with an unexpected bill come tax season.

Expect the Best

It doesn’t matter if you have a small fund or are managing a larger fund with a wide range of institutional investors. Your fund administrator should have the skills and experience to be flexible according to the fund manager’s circumstances.

Where to Find a Fund Administrator

At Essential Fund Services International, known as EFSI, we have years of experience offering solutions to both US onshore and offshore hedge fund and private equity firm clients. We focus on combining modern technology, incorporating AI, with traditional, softer skills, that provides a partnership approach to each of our clients.

Anthony D. Mascia is Managing Partner at EFSI. Connect with him on LinkedIn here.

*******************
EFSI is an independently owned, SOC-1 compliant, full-service fund administration firm. We provide accounting, reporting, administrative, and capital introduction services to a wide range of alternative investment funds including hedge funds, funds of funds, private equity funds, real estate funds, venture capital funds, and family offices. The center of EFSI’s service incorporates resilient technology and accomplished staff, providing clients a tailor-made service with exhaustive transparency. Give us a call today or reach out to our support team online. We look forward to hearing from you soon.