What To Look For When Choosing A Fund Administrator - Phoenix American

10 Jul

If you have decided to partner with a fund administrator for your alternative investment fund, you’ve taken an important step. A professional back-office infrastructure is a smart business decision, allowing you to focus your team’s skills and resources on sales and investments. But a working partnership that is likely to last for 3 to 5 years is something to be approached carefully. These are the most important things you will need to know before choosing a fund administrator.

The History and Experience of the Firm
Some providers have a lot more of the right kind of experience than others. Some firms are primarily transfer agents for exchange-traded funds who imagine that administering non-traded funds is relatively similar. It is not. There is a great deal of hands-on, manual work with investor data in alternative fund operations and many third parties and regulators to satisfy. Experience is key. The administrator to look for has many years of direct experience specifically in the alternative investment fund industry and has developed systems and procedures to address its many unique challenges.

Breadth of Service Offering
Your administrator will manage all your investor data. The option of integrating other related services with that single provider may be invaluable. Does the administrator offer fund accounting, tax services, K-1/1099 preparation, sales reporting, printing and mailing, investor web portal account access? There is a significant efficiency in utilizing a single provider for all investor and asset related services. The more outside parties you and an administrator must work with the more potential for misunderstandings, errors, higher costs and lapses of data security.

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