With the rapid development of the financial industry, investment fund administration has become an increasingly important service. Fund administrators provide back office services to various investment funds like mutual funds, hedge funds, private equity funds, real estate funds etc. Their core responsibilities include fund accounting, preparing financial statements, calculating management fees, capital calls and distributions, investor services, compliance and more. Choosing the right administrator is crucial for investment funds to operate smoothly. This article will summarize the key responsibilities, service models, popular administrators and skills required in this field.
Main responsibilities of investment fund administrators
The core service of fund administrators is fund accounting, which includes daily valuation of portfolio and NAV calculation, recording investment transactions, preparing trial balance and financial statements. They also handle capital calls, distributions, fee calculations based on agreements for funds. Maintaining investor registers, KYC, AML checks are routine investor services. Administrators ensure compliance with regulations in fund jurisdiction and reporting. Additional services like middle office support, tax filings, registered offices are common value-adds.
Types of investment fund administrators
Most administrators are independent service providers like Citco, SS&C, MaplesFS with specialized teams, systems and controls. Many global custodian banks like BNY Mellon, JP Morgan, State Street have large fund administration units. Some big PE/HF sponsors have their own captive administrators. Smaller, boutique administrators focus on specific types of funds in certain jurisdictions. Third-party administration model is most common but funds can also self-administer or use hybrid models.
Popular global investment fund administrators
According to recent surveys, the leading independent administrators globally are Citco, SS&C, MaplesFS, JP Morgan, Northern Trust, BNY Mellon, State Street etc. Citco has the largest market share administered over $1 trillion in AuM across 6000 funds as of 2020. SS&C administers $2.7 trillion in AuM with presence in 80+ countries. MaplesFS, JP Morgan Asset Management and BNY Mellon’s Pershing are other top administrators.
Key skills required for investment fund administrators
Fund accounting knowledge is a must – accounting standards, valuation methods, NAV calculation, fee calculations etc. Expertise in systems like Investran, Geneva is preferred. Understanding of financial instruments, fund structures, regulations is needed. Attention to detail, organization skills are critical in this operationally intensive role. CPA or audit experience provides good foundation. Programming skills are helpful as processes get more automated.
Investment fund administration is a key supporting function for asset management industry. Administrators handle back office operations so that investment managers can focus on managing investments. Leading administrators like Citco, SS&C, MaplesFS provide specialized services across fund types and jurisdictions. Domain knowledge, systems skills, operations excellence are key for this niche career.