Fund Administration, a set of activities that are carried out in support of the actual process of running a collective investment scheme, whether the scheme is a traditional mutual fund, a hedge fund, Pension fund, unit trust or something in between –a duty of a fund manager.
Fund manager often choose to outsource some or all of these activities to external specialist companies such as a fund’s custodian bank; these companies are often known as fund administrators. These administrative activities may include the following administrative functions which may include fund accounting functions. Some of these items may be specific to fund operations in the US and some pertain only whether the fund is an SEC registered fund:
- Calculation of the Net asset value
- Preparation of semi-annual and annual reports to shareholders
- Maintenance and filing of the fund’s financial books and records as the fund accountant
- Payment of fund expenses
- Settlement of daily purchases and sales of securities, ensuring collection of dividends and interests
- Calculation and payment to the transfer agent of dividends and distributions (if required)
- Preparation and filing of the fund’s prospectus
- Preparation and filing of other SEC filings/reports
- Calculation of the total returns and other performance measures of the fund
- Monitoring investment compliance with SEC, prospectus or U.S. Internal Revenue Code restrictions
- Supervision of the orderly liquidation and dissolution of the fund (if required)
As a fund administration manager, whether the process is internal or external, you need to manage every aspect of fund administration and fund accounting in a cost-effective manner. And a good fund administration system tool helps you to do just that, providing fully automated workflows and regulatory reporting across a broad range of complex and sophisticated fund structures – efficiently and effortlessly.
The primary goal of fund administration system tool is to put an ease to the process as a whole. This tool will provide fund managers the capability to handle increasing transaction volumes, reducing time-to-market for new funds and scaling your business without an increase in marginal costs. Fund administration system will also enable you to adapt to various regulations simultaneously, and you benefit from the transparency available throughout the entire investment process.