Why partnering with the right fund administrator will help you grow your fund – and returns.
Whether you self-administer your funds or are having issues with your existing provider, switching to the right third-party fund administrator could be one of the best strategic decisions you ever make. If you’re wondering exactly how fund administration can become a key asset for your business, asking yourself the following questions may help.
- Are fund administration issues distracting you from value-add initiatives?
The responsibilities of CFOs and their teams have transformed dramatically in the past half-decade. Instead of the inward-focused approach traditionally associated with their role, they are now increasingly considering strategic partners with a more outward-facing focus. PWC describe this transition as being ‘from a fiduciary one (a custodian preserving value) to a visionary one (an architect creating value)’1. As tasks have broadened to encompass areas such as technology strategy, investor relations, and analysis of capital allocation, aspects such as fund accounting, regulatory compliance, reporting and overseeing audits can become distracting. Even with these responsibilities outsourced to a fund administrator, it could prove time-consuming if the selected entity isn’t well-suited to your firm. By collaborating with a competent, experienced third-party, you can return your attention to the value-add – fostering relationships, raising funds, and seizing opportunities. - Are you struggling to manage expenses?
Increased competition and heightened investor expectations mean expenses are being scrutinized more than ever and are a constant threat to the profitability of your funds. In an EY survey, when asked how fund managers could best demonstrate flexibility, the majority of investors pointed to negotiations around management fees2. Given the highly competitive environment, the pressure to cut costs is real – but that should never mean cutting corners. By leveraging the economies of scale an established, effective fund administrator can offer, you can improve the operational efficiency of your fund and compensate for downward pressure. - Is your technology stack a barrier to scalability?
The quality and performance of specialist fund administration technology is evolving rapidly with the application of machine learning and generative AI supporting a wider range of tasks – from accounting, fund reporting and regulatory compliance to investor relations and fund analysis. However, the cost of developing your own systems for these tasks is prohibitive, while using off-the-shelf solutions from multiple providers can cause serious integration problems. The right third-party administrator will be able to offer a technology solution with built-in compliance and data security, institutional-grade accounting, simple document management, and unmatched transparency. All supported by expert human oversight. - Are your current capabilities frustrating your ambitions and plans for growth?
In the face of fierce competition, many firms are looking beyond the traditional investor base to raise capital for their funds. For example, with nearly half of advisers either already actively investing in alternative assets for their clients or intending to do so3, the US retail market is attracting strong attention from funds. Meanwhile, managers are increasingly looking to access a wider pool of investor capital by expanding internationally. However, expanding into new markets brings with it novel challenges and risks. Working with a fund administrator with retail expertise and/or global reach makes these ambitions achievable. - Are your processes and resourcing levels exposing you to unnecessary risk?
The regulatory and compliance environment for funds is complex and constantly evolving. It’s therefore vital not just to be aware of the rules as they stand but to actively follow developments and understand the implications of new regulations before they come into force. As well as ensuring compliance with existing regulatory and investor reporting requirements, a high-quality administrator will flag the potential impact of new regulation and help you adapt your processes accordingly. At the same time, they will help you ensure that your risk management is exemplary, and that your fund meets all the controls and data security measures investors are looking for in their operational due diligence reviews.
If the answer to any of the above questions is ‘yes’, partnering with JTC is likely to be a surprisingly easy decision to make.
To find out more about our services and to discuss how we can become a strategic asset for your business, get in touch with our team by filling out the form below.
