Fund Administration – A Valuable Ally For The Emerging Manager
Fund Administration now requires multiple competencies and the need to assume a much broader role in supporting multiple functions within risk and portfolio management.
Emerging managers have a bright future ahead of them. Private equity and venture capital have matured, and the alternative investment universe as a whole is gaining the attention of more investors than ever. There is a greater availability of offerings, a proven track record of superior performance, tighter regulatory constraints and a growing commitment to transparency as provided by the top fund administration providers.
The majority of investors now consider emerging managers, spin-outs and first-time funds to be acceptable options for their portfolios. These were earlier regarded as too risky for conservative investors. However, to seize this pivotal opportunity, emerging managers must demonstrate that they not only have a compelling investment thesis but also the fund administration infrastructure to back it up.
Investors Due Dilligence
Fund administration can provide an investor web portal for access to reporting, documents, statements, tax forms and to submit questions and requests to management. CFO portals and file transfer protocol (FTP) connections can be provided by fund administration providers to streamline functions within the operational team. A fund administration partner will have its own IT team that manages, maintains and enhances the fund administration technology that supports client funds.
Specialized Fund Administration Systems and Client Services
Current fund administration clients willing to provide references in detailed terms point to the competence and reliability of a fund administration provider in the eyes of clients. A fund administration firm’s internal rate of service employee turnover indicates the level of morale and cohesion within the fund administration firm. The industry reputation of a fund administration company among financial advisors, custodian, wire houses and other industry participants is also significant.