What is Fund Administration? Aka Fund Admin

Summary

Fund Admin is a term shared across industries and it means something different depending upon the requirements of the specific fund, which is strongly driven by the industry (Real estate vs. stock market) and type (closed-end vs. open-ended). 

Here are two definitions across two separate industries:

Real Assets Advisor → Real estate and alternative investments focused

Fund administration is an outsourcing of support functions needed to run an investment management platform. The services include accounting, administration, investor servicing/reporting, financial and statutory reporting, treasury and depositary services, and corporate secretarial activities. The fund administrator often specializes in the specific investment type — real estate, infrastructure, private equity, hedge funds, etc. The fund administrator can provide the middle-office and back-office support enabling the investment manager to focus on value-add services.

Apex Group -> financial markets focused (stocks, mutual funds, etc)

Essentially, a fund administrator is an outsourced third-party service provider that protects the interests of investors by independently verifying the assets and valuation of the fund. By outsourcing the fund administration function, fund managers are allowed the freedom to focus on portfolio management internally. Typically, fund administration comprises two parts: fund accounting and the activities of the registrar/transfer agent.

The traditional role of a fund administrator includes the following services:

• Daily, weekly and monthly Net asset Value calculation (NAV)

• Calculation of the fund’s income and expense accruals and the pricing of securities at current market value

• Financial reporting

• Financial statement preparation and audit liaison

• Opening and control of fund bank accounts

• Preparation of reports to shareholders

• Reconciliation of the broker, custodian, bank and investment manager statements

• Accounting services; maintenance and filing of the fund’s financial books and records

• Payment of fund expenses

• Settlement of daily purchases and sales of securities, ensuring collection of dividends and interests

• Calculation and payment of dividends and distributions to the transfer agent

• Preparation and filing of local regulatory body filings/reports

• Pricing the portfolio of the fund

• Calculation of the total returns and other performance measures of the fund

• Compliance and anti-money laundering monitoring and reporting

• Supervision of the orderly liquidation and dissolution of the fund (if required)

SyndicationPro defines fund admin to include the following services: