This article is based on a Podcast contents of a same title:
Hello, it me, Shinobu.
In Episode 5, I shift the focus from structures and regulations to something more personal:
what fund administrators actually do.
The timing is connected to the panel discussion I moderated on May 13, co-hosted by DBS, Anderson Mori & Tomotsune, and Carey Olsen.
Speaking with legal and accounting professionals reminded me how little the role of fund administrators is understood.
This episode is an attempt to explain the work quietly and clearly.
Before we go further, you may want to refer to past episodes for your references:
Episode 3: Comparing the three vessels of fund structures
Episode 4: Why Japan Loves Unit Trusts (again) — and When Partnerships Work Better
Fund administrator’s works are an accumulation of supports every activity surrounding the investments, calmly.
Let’s begin with a high-level overview of what fund administrators actually do, with the following chart first.
1. What Is a Fund Administrator?
I often describe myself as “a back-office person,”but fund administration is far more than clerical work.
Whenever a fund makes an investment, money moves, records are created, and reporting becomes necessary. Administrators support this entire chain.
2. Daily Accounting and Financial Statements
You may grab a stream from every small financial activity into a form of financial statements and investment report in a figure below:
These daily activities form the foundation of transparent reporting and investor communication.
Every transaction — buying securities, paying legal fees, receiving distributions — must be recorded accurately.
From these entries, we prepare:
- Balance sheets
- Income statements
- Cash flow statements
- Investor reports
These are the foundation of fund transparency.
3. Investor Reporting and IR Support
Once financial statements are prepared, we help create investor reports and respond to investor inquiries in coordination with IR teams.
4. Audit Support and Tax Requirements (FATCA / CRS)
Funds undergo annual audits. Administrators coordinate:
- Fair value discussions
- Supporting documents
- Transaction reviews
- FATCA/CRS-related information
5. Capital Calls and Distributions (PE-Specific Work)
Entire work flow for capital calls and distributions always cause mis-understandings. You can see the flow of decisions and cash flow below:
Private equity funds operate through capital calls. We handle:
- Calculating each investor’s commitment
- Preparing notices
- Confirming receipts
- Executing payments
- Distribution calculations, including carried interest
Accuracy is critical.
6. AML / KYC
We verify:
- Investor identity
- Ultimate beneficial owners
- Screening results
- Country-specific requirements
This work requires expertise and careful judgment.
7. The Value of Administration
Fund administration is the infrastructure that allows managers to focus on investing.
It requires:
- Accuracy
- Speed
- Communication
- Systems
- Training
8. A Message to Younger Professionals
For those interested in the fund industry, administration offers a deep understanding of how funds truly operate.
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Links
If you are keen to past episodes:
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