{"id":3893,"date":"2026-10-30T08:30:00","date_gmt":"2026-10-29T23:30:00","guid":{"rendered":"https:\/\/slowsteps.com\/?p=3893"},"modified":"2026-10-29T20:53:36","modified_gmt":"2026-10-29T11:53:36","slug":"fund-operations-information-design","status":"publish","type":"post","link":"https:\/\/slowsteps.com\/en\/fund-structuring\/fund-operations-information-design\/","title":{"rendered":"Fund Operations Starts with Tidying Up &#8211; Designing Information, Rules and Accountability in the Age of Generative AI"},"content":{"rendered":"\n<div class=\"wp-block-bogo-language-switcher\"><ul class=\"bogo-language-switcher list-view\"><li class=\"en-US en current first\"><span class=\"bogoflags bogoflags-us\"><\/span> <span class=\"bogo-language-name\"><a rel=\"alternate\" hreflang=\"en-US\" href=\"https:\/\/slowsteps.com\/en\/wp-json\/wp\/v2\/posts\/3893\/\" title=\"English\" class=\"current\" aria-current=\"page\">English<\/a><\/span><\/li>\n<li class=\"ja last\"><span class=\"bogoflags bogoflags-jp\"><\/span> <span class=\"bogo-language-name\"><a rel=\"alternate\" hreflang=\"ja\" href=\"https:\/\/slowsteps.com\/wp-json\/wp\/v2\/posts\/3893\/\" title=\"Japanese\">\u65e5\u672c\u8a9e<\/a><\/span><\/li>\n<\/ul><\/div>\n\n\n\n<p class=\"wp-block-paragraph\">I generally prefer not to write articles that are too closely tied to current events. Articles tend to last longer when they are not anchored to a particular moment in time.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This time, however, there was something I wanted to preserve.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Since re-establishing a fund administration business, I have occasionally organised seminars with the rather presumptuous intention of introducing interesting topics and interesting professionals in the fund industry to a wider audience.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/forms.gle\/VXEaourm6fvrYX2e6\" target=\"_blank\" rel=\"noopener\">The seminar that prompted this article was about generative AI<\/a>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The actual content of the seminar belongs to those who attended. We recorded the sessions as well, but the recordings are available only to those who registered.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So I am not going to reproduce what the speakers shared.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">What I do want to explore is a question that emerged from the discussion and that, I think, matters well beyond AI.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Let us start somewhere slightly unexpected.<\/p>\n\n\n\n<!--more-->\n\n\n\n<h2 class=\"wp-block-heading\">Let Me Ask Again: What Is the Business of Running a Fund?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">What does fund operations actually do?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">And as I often say, I mean <em>fund operations<\/em>, not <em>investment management<\/em>, although the same way of thinking could equally be applied to the investment process.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">When someone first joins a company without knowing their way around, the easiest thing to do is whatever the manager says, or whatever has always been done.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That is not unique to funds.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Replace &#8220;manager&#8221; with &#8220;investor&#8221;, or even &#8220;CEO&#8221;, and the pattern remains the same.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The person keeping you busy may simply be doing something because someone else told that person to do it.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So perhaps nobody is particularly different from anyone else.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But is that really what a company, an organisation, or a fund back office is supposed to be?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Just doing what we are told?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If nobody, from the CEO to the most junior member of staff, stops to ask that question, the discussion ends rather quickly:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><em>&#8220;Well, that&#8217;s just how fund operations works.&#8221;<\/em><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Thank you very much. We can all go home.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But let us instead step back and ask what a fund is trying to achieve, and therefore what actually needs to happen.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">At its most respectable, a fund invests capital to increase the value of assets and thereby contribute to society.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Underneath that respectable description, of course, people may also want to buy low, sell high, make money and perhaps earn enough carried interest to retire early.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Let us not say that part too loudly.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Don&#8217;t worry. Whatever you say, everyone probably knows what is going on in the back of your mind anyway.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In order to invest, the fund first needs investment opportunities.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">On the other side, it needs capital.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That capital can come from investors, banks providing acquisition or bridge financing, private credit funds and other providers of leverage.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The investment strategy, the underlying companies or real estate, and whatever else is available must be explained convincingly enough for those capital providers to commit their money.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">When the investment is ready, capital is drawn or borrowed and used to acquire the investment.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">We therefore need a neutral vehicle to connect those who provide capital with those who need it.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That vehicle is the fund.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">By the time the first investment is made, the vehicle has been established, capital has been raised and money has gone into an investment.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">At that point, it certainly <em>feels<\/em> like:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">&#8220;Ah. We are running a fund now.&#8221;<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">Unfortunately, that is only the entrance.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Investors and lenders are waiting to get their money back.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The manager therefore needs to report on the progress of investments and explain how eventual repayment or distributions may occur.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The portfolio company or asset needs active work to increase its value.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Potential buyers need to be identified.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Exit negotiations need to happen.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Eventually, if things go reasonably well, an investment is sold, cash is recovered, capital is returned to investors and lenders, and the investment reaches its end.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Only when all investments have completed that journey can the fund finally fulfil its purpose, wind itself up and end its life.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Now step back and look at that entire picture.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">What actually exists inside a fund?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">There are contracts defining obligations between investors and the fund: commitments, capital calls, reporting obligations and distributions.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Those contracts cause movements of cash.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">On the asset side, there are subscription agreements, purchase agreements and eventual sale agreements.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Those also cause movements of cash.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Viewed purely as economic activity, much of a fund therefore consists of evidence-backed transactions executed according to agreed terms.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Those transactions are recorded through accounting.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The accumulated results become financial statements.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Auditors then examine those statements against supporting evidence and applicable accounting principles.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">None of this is particularly exotic.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Businesses have been doing versions of it for centuries.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">I once experienced an interesting example myself in the audit of a Cayman fund.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As part of discussions surrounding management representations, I was asked about the use of generative AI and ended up discussing the reasoning behind the question with the Cayman auditor.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">AI usage has changed considerably since then, so I would not assume that the same wording or confirmation is still requested today.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But the underlying issue remains important.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The real question is not whether AI happened to be used.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The question is whether the facts underlying the financial statements and the process that produced them can be explained, and whether somebody ultimately accepts responsibility for the output.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h1 class=\"wp-block-heading\">Does Fund Operations Have a Way of &#8220;Tidying Up&#8221; Information?<\/h1>\n\n\n\n<p class=\"wp-block-paragraph\">So why do we expect generative AI to make operational processes more efficient?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Perhaps because a fund is, among other things, an information business.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Again and again, we:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">obtain information, organise it, and use it.<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">And at every stage there are tedious, expensive and time-consuming tasks.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Take a transaction agreement.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Buried inside pages of unstructured language may be the information required to settle an investment:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>payment amount;<\/li>\n\n\n\n<li>payment date;<\/li>\n\n\n\n<li>recipient;<\/li>\n\n\n\n<li>settlement instructions.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">One could, in principle, simply send the entire agreement to the investment committee.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If the committee asks when the money is required and how much is needed, one could say:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">&#8220;It&#8217;s in the agreement. Go and find it yourself.&#8221;<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">After all, I had to struggle to find it. Why shouldn&#8217;t everyone else?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This is technically possible.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It is also a wonderful way to make an investment committee slightly less functional.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">At least put a sticky note on the relevant page.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Once we think beyond the immediate decision, the same information becomes much more valuable.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Suppose the fund needs to call capital not only for the investment price, but also for transaction expenses.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Invoices arrive from lawyers and accountants for due diligence and transaction work.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If the relevant information from all those documents is extracted into the same structured format:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>when;<\/li>\n\n\n\n<li>payable to whom;<\/li>\n\n\n\n<li>how much;<\/li>\n\n\n\n<li>for what purpose;<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">then even something as simple as an Excel sheet can become the basis for multiple subsequent processes.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The information can support:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>the investment committee summary;<\/li>\n\n\n\n<li>the capital call notice;<\/li>\n\n\n\n<li>future cash-flow forecasting;<\/li>\n\n\n\n<li>payment instructions for online banking;<\/li>\n\n\n\n<li>accounting;<\/li>\n\n\n\n<li>later investor reporting;<\/li>\n\n\n\n<li>eventually, performance calculations based on cash flows.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">A small amount of organisation today can reduce quite a lot of work for your future self and everyone else.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Possibly even some overtime.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The difficulty is that these activities have traditionally depended heavily on people.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Someone must read the document.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Someone must understand the language.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Someone must imagine how the information may be needed later.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Consider something slightly less familiar.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Suppose someone suddenly hands a Japanese fund professional an invoice written in Swahili.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">How many people could immediately understand it and process the payment correctly?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">And even when everyone can read the language, another problem remains.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">One person stores a document here.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Another stores a copy somewhere else.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So where is the information?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Which version is correct?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If both are correct, where did each copy come from?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">We trace where our wagyu beef, tomatoes and other food came from.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Yet in fund operations, we often struggle to trace where a number or piece of information came from.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Interesting, isn&#8217;t it?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The way people tidy up a home reflects the shape of the home, the habits of the family and, perhaps, the family&#8217;s history.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If nobody famous has said that before, I shall claim to be the first.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The same idea applies to organisations.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If information management follows the personal habits of individual employees, the system may make perfect sense to the person who created it and absolutely no sense to anybody else.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If that person leaves, everyone else starts wandering around like a confused robot vacuum in a house whose layout it never learned.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Multiply that behaviour across several employees and the result becomes even more interesting.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Multiple copies of identical information occupy limited corporate storage.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The copies quietly undermine one another&#8217;s credibility:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">&#8220;Are you the real version?&#8221;<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">Two corporate doppelg\u00e4ngers staring silently at each other.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">There is also another temptation.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Information asymmetry can create the illusion of power.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Someone may believe that possessing information nobody else has creates personal importance.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So that person keeps important information privately, shares it with nobody, and quietly enjoys being &#8220;the person who knows&#8221;.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Usually, nothing particularly dramatic follows.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The information ages.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Its usefulness declines.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Its supposed strategic advantage disappears.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Eventually somebody asks:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">&#8220;What was this again?&#8221;<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">Information tends to create more value when it is shared with the people who are entitled to use it.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The broader lesson is simple.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">When information is obtained, stored and used based only on local optimisation, the organisation can easily end up very far away from overall optimisation.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h1 class=\"wp-block-heading\">Will Generative AI Solve This?<\/h1>\n\n\n\n<p class=\"wp-block-paragraph\">Perhaps AI can help with parts of the problem.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">AI can be extremely useful when obtaining and extracting information.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A PDF may technically be a PDF while containing nothing more than scanned images.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">AI-enabled tools can read the images, convert them into usable text and extract structured information far faster than a person could manually retype everything.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Return to the Swahili invoice.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Today it is entirely conceivable that a tool can identify:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>the amount;<\/li>\n\n\n\n<li>the due date;<\/li>\n\n\n\n<li>bank details;<\/li>\n\n\n\n<li>the nature of the invoice;<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">and translate the contents into a language the user understands.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That is genuinely useful.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It can produce very significant efficiency at an individual level.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It can also make us feel rather competent.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But if the process ends with:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">&#8220;Great, I understood the invoice.&#8221;<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">then we have solved only a personal problem.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A fund is not run by one person.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Fund investing involves a wider operating ecosystem that may include a GP sponsor, directors of the GP vehicle, corporate secretarial functions, administrators, auditors and others.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Knowing something personally, even as the CIO or CEO, does not move the fund forward.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So what?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The information needs to proceed to the next step.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Is the invoice actually related to the fund?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Has it already been paid?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Is the payment authorised?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">What accounting treatment is required?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">What information must be retained?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Who else will need the data later?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Once those questions are considered, we arrive at a different design problem.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">How do we make the information available as a trusted <strong><a href=\"https:\/\/en.wikipedia.org\/wiki\/Single_source_of_truth\" target=\"_blank\" rel=\"noopener\">Single Source of Truth<\/a> (SSoT)<\/strong> so that subsequent processes can use it consistently?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">And perhaps that concept eventually needs to extend beyond the boundary of the organisation as well.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Why?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Because everyone in the operating chain has versions of the same problem.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h1 class=\"wp-block-heading\">Is This Really an AI Problem?<\/h1>\n\n\n\n<p class=\"wp-block-paragraph\">Probably not.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Before asking what AI should do, we may first need to look across the entire workflow.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">How is information obtained?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">How will it be used later?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">How should it be structured?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Where should the authoritative version be stored?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Which unnecessary movements and copies can be removed?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In other words, perhaps the problem is much closer to something we learned at nursery:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\"><strong>Decide where things belong, use them, and put them back where everyone knows where to find them.<\/strong><\/p>\n<\/blockquote>\n\n\n\n<figure class=\"wp-block-image size-large\"><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"683\" src=\"https:\/\/i0.wp.com\/slowsteps.com\/wp-content\/uploads\/2026\/10\/Designer.png?resize=1024%2C683&#038;ssl=1\" alt=\"Fund Operations Starts with Tidying Up\" class=\"wp-image-3889\" srcset=\"https:\/\/i0.wp.com\/slowsteps.com\/wp-content\/uploads\/2026\/10\/Designer.png?resize=1024%2C683&amp;ssl=1 1024w, https:\/\/i0.wp.com\/slowsteps.com\/wp-content\/uploads\/2026\/10\/Designer.png?resize=300%2C200&amp;ssl=1 300w, https:\/\/i0.wp.com\/slowsteps.com\/wp-content\/uploads\/2026\/10\/Designer.png?resize=768%2C512&amp;ssl=1 768w, https:\/\/i0.wp.com\/slowsteps.com\/wp-content\/uploads\/2026\/10\/Designer.png?resize=1320%2C880&amp;ssl=1 1320w, https:\/\/i0.wp.com\/slowsteps.com\/wp-content\/uploads\/2026\/10\/Designer.png?w=1536&amp;ssl=1 1536w\" sizes=\"auto, (max-width: 1000px) 100vw, 1000px\" \/><figcaption class=\"wp-element-caption\">\u30d5\u30a1\u30f3\u30c9\u904b\u55b6\u306f\u300c\u304a\u7247\u4ed8\u3051\u300d\u304b\u3089\u59cb\u307e\u308b<br>Fund Operations Starts with Tidying Up<\/figcaption><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">Only after that do we ask:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>What should people do?<\/li>\n\n\n\n<li>What should traditional software or macros do automatically?<\/li>\n\n\n\n<li>Where might AI genuinely help?<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">And one principle matters throughout:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\"><strong>Facts must remain facts.<\/strong><\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">Auditors and investors do not want a plausible-sounding story that nobody can trace back to evidence.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/slowsteps.com\/en\/podcast\/reporting-japan-overseas-structure\/\" data-type=\"post\" data-id=\"3647\">Financial statements<\/a> need support.  <a href=\"https:\/\/slowsteps.com\/en\/podcast\/reporting-japan-overseas-structure\/\" data-type=\"post\" data-id=\"3647\" target=\"_blank\" rel=\"noopener\">Investor reports <\/a>also need support.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Capital call notices requesting investors&#8217; money need support.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/slowsteps.com\/en\/podcast\/why-waterfalls-exist\/\" data-type=\"post\" data-id=\"3771\" target=\"_blank\" rel=\"noopener\">Distribution notices returning investors&#8217; capital<\/a> need support.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/slowsteps.com\/en\/podcast\/episode-7-rethinking-performance-metrics\/\" data-type=\"post\" data-id=\"3565\" target=\"_blank\" rel=\"noopener\">IRR, TVPI and DPI calculations<\/a> need reliable underlying cash flows.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Carried interest allocations generated through waterfall calculations need reliable source data and reproducible logic.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If AI can generate correct code implementing a waterfall calculation, wonderful.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Once the calculation logic has been turned into deterministic code, however, the calculation itself does not need a generative AI model to run it.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That is a feature, not a problem.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">We can use AI where AI adds value while removing worries about probabilistic language generation from processes that require accuracy, consistency and reproducibility.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Human review does not disappear either.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">We have always needed to review work against evidence.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">At a minimum, we still need the equivalent of the sticky note saying:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">&#8220;Look here. This is the evidence.&#8221;<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">Whether the work was performed by a person or by AI does not change the organisation&#8217;s responsibility for the output.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">We would not normally accept:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">&#8220;The member of staff made a mistake.&#8221;<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">as a sufficient explanation.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So why would:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">&#8220;AI produced it.&#8221;<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">be any better?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Optimising processes therefore creates two separate responsibilities.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">First, someone must decide what should be done by people, by conventional systems and by AI.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Second, the organisation needs controls allowing it to accept responsibility for the result regardless of who, or what, produced it.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h1 class=\"wp-block-heading\">Now, Let Us Start Again from Nothing<\/h1>\n\n\n\n<p class=\"wp-block-paragraph\">Consider a thought experiment.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Suppose you are starting a company from scratch.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Congratulations. You are finally the boss.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">What exists inside the company on the first morning?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Almost nothing.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For better or worse, you have the most troublesome form of freedom imaginable: nothing has been decided yet.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Unfortunately, most people who join you will assume that rules exist.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Even in a tiny company, employees often expect policies, procedures and consistent treatment similar to those provided by much larger organisations.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Someone will eventually say:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">&#8220;But my previous company did it this way.&#8221;<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">Of course they will.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">You started from zero.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So what should you do?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Decide which principles actually matter to the organisation.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Define rules for the outputs you need.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Select tools that support those rules.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Allow people to accumulate experience by repeatedly producing reliable, reproducible outputs.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That repetition produces business consistency.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Consistency supports stable performance.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">And, over time, both the company and its people can grow.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Funds are no different.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A fund manager should not design an operating model merely because the Cayman regulator issued a governance code.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Nor because a regulator asks about operational arrangements.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Nor because an investor asks a question during operational due diligence.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Those external requirements matter.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But good operations should exist because the organisation itself has decided how it intends to operate.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The fund should have a rulebook.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Inputs such as the investment strategy, underlying investments and investor requirements should be understood.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Outputs should be defined.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Processes should be operated consistently.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Where something does not work, the model should be adjusted.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Investments, capital movements, accounting, reporting and all the other economic activities around the fund then operate within that framework.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Information is obtained.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It is stored so that people authorised to access it can use and transform it.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It is shared appropriately.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">And only then does the AI question become particularly useful.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If the same final output must be produced regardless of whether a person performs a step, conventional software performs it, or AI performs part of it, then perhaps the best design is the one reached by working backwards:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">Which combination produces the required outcome most efficiently, most consistently and with the lowest likelihood of error?<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">Ultimately, that choice says something about the culture of the organisation.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Are we building a business as a team?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Or are we optimising for each individual to work in whichever way happens to suit that person best?<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h1 class=\"wp-block-heading\">Wait. Wasn&#8217;t This Supposed to Be an Article About an AI Seminar?<\/h1>\n\n\n\n<p class=\"wp-block-paragraph\">Yes.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The seminar was about generative AI.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But the question I brought home was not really about AI.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It was this:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\"><strong>How well do we actually understand our own work?<\/strong><\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">In an odd way, it felt like returning to something we learnt at nursery.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Generative AI may automate work.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Before it can do so effectively, however, we need to be able to explain the work.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">What is fact?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">What is judgement?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">What is explanation?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">What is coordination?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Organisations that can make those distinctions will be better placed to use AI.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">They will also be better placed to let people do what people do best.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">And perhaps, more importantly, to give people room to think and grow.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So maybe the first step in adopting AI is not adopting another AI tool.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It is something much less fashionable:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\"><strong>Understand your own work well enough to explain it.<\/strong><\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">AI can come afterwards.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n","protected":false},"excerpt":{"rendered":"<p>What if the first step in adopting AI is not choosing an AI tool, but understanding your own work? Fund operations can be viewed as a continuous process of obtaining, structuring, storing and using information. Perhaps the real challenge is learning how to tidy it up.<\/p>\n","protected":false},"author":94403148,"featured_media":3889,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"advanced_seo_description":"Before asking what AI can automate in fund operations, we should understand the work itself. A practical look at information, SSoT, rules, evidence, operating models and organisational accountability.","jetpack_seo_html_title":"Fund Operations Starts with Tidying Up | AI, Information and Operating Models","jetpack_seo_noindex":false,"jetpack_seo_schema_type":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_locale":"en_US","_original_post":"https:\/\/slowsteps.com\/?p=3887","_wpcom_ai_launchpad_first_post":false,"_jetpack_feature_clip_id":0,"_jetpack_hide_featured_image":false,"_jetpack_featured_image_duplicate_dismissed":3889,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"{title}\n\nA rather heavy Friday morning read about\u2026 tidying up.\n\nWe ran a seminar about generative AI.\n Somehow, the question I brought home was much simpler:\n\nHow well do we actually understand our own work?\n\nPerhaps AI can come afterwards.\n{url}","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"_wpas_customize_per_network":false,"jetpack_post_was_ever_published":false},"categories":[775587849,775587853],"tags":[775588044,775588048,775588032,216410,775587875,775588045,775588049,775588046,29172,775588047],"class_list":["post-3893","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-fund-structuring","category-operations-governance","tag-artificial-intelligence","tag-data-governance","tag-fund-administration","tag-fund-governance","tag-fund-operations","tag-generative-ai","tag-internal-control","tag-operating-model","tag-private-equity","tag-single-source-of-truth","en-US"],"jetpack_publicize_connections":[],"jetpack_likes_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/pg8vem-10N","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"https:\/\/i0.wp.com\/slowsteps.com\/wp-content\/uploads\/2026\/10\/Designer.png?fit=1536%2C1024&ssl=1","_links":{"self":[{"href":"https:\/\/slowsteps.com\/wp-json\/wp\/v2\/posts\/3893","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/slowsteps.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/slowsteps.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/slowsteps.com\/wp-json\/wp\/v2\/users\/94403148"}],"replies":[{"embeddable":true,"href":"https:\/\/slowsteps.com\/wp-json\/wp\/v2\/comments?post=3893"}],"version-history":[{"count":6,"href":"https:\/\/slowsteps.com\/wp-json\/wp\/v2\/posts\/3893\/revisions"}],"predecessor-version":[{"id":3900,"href":"https:\/\/slowsteps.com\/wp-json\/wp\/v2\/posts\/3893\/revisions\/3900"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/slowsteps.com\/wp-json\/wp\/v2\/media\/3889"}],"wp:attachment":[{"href":"https:\/\/slowsteps.com\/wp-json\/wp\/v2\/media?parent=3893"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/slowsteps.com\/wp-json\/wp\/v2\/categories?post=3893"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/slowsteps.com\/wp-json\/wp\/v2\/tags?post=3893"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}