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For alternative investment managers, raising capital has never been more competitive. Institutional allocators are increasingly discerning, due diligence processes are more demanding, and investor expectations around transparency and operational maturity continue to rise. In this environment, partnering with a third-party fund administrator, as opposed to performing the function in-house, can do more than streamline back-office functions – it can actively enhance your capital raising efforts.
Here’s how.
Credibility and Institutional Readiness
Allocators are wary of operational risk, particularly when evaluating smaller or emerging fund managers. A reputable third-party fund administrator signals operational maturity and professionalization. It shows you’ve made a strategic decision to separate duties, which helps address concerns around conflicts of interest, valuation practices, and internal controls.
For institutional investors and family offices alike, this added layer of oversight can tip the scales in your favor – especially when you’re competing with larger or more established players.
Faster, More Reliable Reporting
Investor expectations around reporting have evolved. Today’s LPs want timely, accurate, and transparent data—and they want it in a format that aligns with their internal systems. Fund administrators specialize in producing investor reports, NAVs, and capital account statements with speed and consistency.
When you’re raising capital, the ability to demonstrate a history of clean, timely reporting – backed by a third-party – is a major trust builder. It shows prospective investors that they won’t need to chase you for basic numbers or explanations.
Support for the Due Diligence Process
Fund administrators can be a major asset during due diligence. Many are well-versed in the questionnaires and documentation allocators request and can help you gather and organize materials quickly.
More importantly, they lend confidence to your responses. When a prospect asks who’s responsible for cash controls, pricing oversight, or waterfall calculations, having an independent administrator in place makes the answer stronger by default.
Scalability Without Sacrificing Focus
As your investor base grows, so does the complexity of managing capital calls, distributions, and reporting. Relying on a lean in-house team to handle these tasks can lead to bottlenecks – or worse, errors—just as you’re trying to close new commitments.
Fund administrators are built for scale. They can onboard new investors efficiently, handle complex fund structures, and provide ongoing operational support – all while freeing your internal team to focus on what you do best: sourcing deals, managing portfolios, and building investor relationships.
A Flexible Resource That Evolves With You
A common concern among managers is whether a third-party administrator will slow them down or limit customization. In reality, a good fund administrator should feel like an extension of your team. Most offer tailored service models, technology integrations, and workflows designed to meet your unique requirements.
As your fund grows – launching new strategies, attracting international investors, or exploring co-investments – your administrator grows with you, helping to maintain continuity and operational discipline throughout your fundraising journey.
Choosing to outsource fund administration isn’t just a back-office decision. It’s a front-line signal to investors that your operation is built on sound infrastructure, governance, and transparency. In a market where LPs are doing more due diligence than ever, that credibility can directly support your capital raising goals.
In short: your fund administrator isn’t just a service provider. They can be a strategic ally – helping you inspire confidence, close commitments, and position your fund for long-term growth.
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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.