The Most Experienced Member of Your Team Could be Your Fund Administrator

JTC’s Todd Rosenzweig joined an industry panel to discuss the decisions facing new fund managers and the benefits of securing the right team from the beginning.

New fund managers face a lot of decisions, and plotting out your future can be difficult in an industry changing so rapidly. That’s why it’s good to learn from those with experience. For managers embarking on their first real estate funds, that experience could come from service providers who have dealt with hundreds of funds with similar issues.

Fund Launch Pain Points: Efficient Fund Structuring, Smooth Administration, Regulatory Governance & Investor Communications was the topic of a recent panel discussion at the 2025 IMN Real Estate Private Funds Summer Forum, where a number of industry experts, including JTC Senior Director – Institutional Client Services Todd Rosenzweig, talked through some of the challenges facing new fund managers and the mistakes they see time and again.

What new fund managers need to understand about today’s investors

The panel started off by discussing how today’s real estate environment can be a difficult one for managers starting their first funds. As the speakers noted, going from individual deals to managing a fund can be a big leap. The conversation touched on such topics as the tax advantages and downsides of REITs, GP co-investments and specific concerns for open-ended funds. One thing several panelists stressed was the need to cater to the expectations of LPs.

“Investor expectations have changed drastically over the last several years,” said Rosenzweig. “You have to be more specialized.”

He noted that with so many niche funds on the market, the need for specialized expertise extends beyond the managers themselves.

“We’re also seeing fund administrators that really need to have specialized technology to ultimately give better reporting to the LPs,” he said. “The LPs are very smart, and you ultimately have to deliver to them.”

Third-party fund administration for new funds

While in the past, the choice of whether to outsource fund administration could be put off until later, the panelists said many investors now expect a third-party fund administrator to provide additional oversight from the beginning. What should first-time managers look for in a fund admin? Rosenzweig ran through some of the things it’s crucial to know about any potential administrator.

“How long has the new fund administrator been around? Can they handle the strategy that you’re bringing over to them? Do they have expertise in a certain area? Because there are fund administrators that just focus on, say, closed-ended funds. There are some that just focus on hedge funds. There are some that can handle all the different types of structures,” said Rosenzweig.

In terms of deciding what functions to outsource, when, and how, the panelists stressed letting the fund administrator know your plans up front. That way, you can get a sense of whether they have the expertise and bandwidth for the scope, timeline and goals you have for your fund. If you don’t have that conversation, you won’t know if they can deliver.

The most common mistakes of first-time fund managers

A benefit of working with experienced service providers is that they have seen what is done wrong. When asked about the most common mistakes of first-time fund managers, Rosenzweig said not a week goes by without JTC’s team talking with new managers who want to start fundraising, but have yet to select an attorney, auditor or fund administrator.

“If you want to go out and raise capital from LPs,” he explained, “the first question they’re going to ask is, ‘Who are your service providers? Who is your lawyer? Do you have your documents in place?’” Managers who haven’t solidified those relationships ahead of time, are doing themselves a disservice, he said.

“It’s hard enough, in today’s environment, to raise capital and if you don’t have those items in place, it’s going to be very hard to raise capital.”

Other panelists mentioned the guidance they’ve received from service providers in the form of legal or accounting advice, saying that if they had to do it all over again, they’d rely more on those experienced service providers to help them think things through.

Rosenzweig was asked what expertise to look for when considering a fund administrator. His response was to remember the practicalities that will affect the relationship.

“Who’s my team? Who’s going to be my point of contact?” These are the people you’ll actually be dealing with, and at the end of the day, fund administration is a people business.

But beyond the human factor, there are requirements that shouldn’t be overlooked.

“Most important is that they’re SOC-1 compliant,” concluded Rosenzweig. “That means that their books and records are fully audited.”

To learn more about JTC’s third-party fund administration solutions for real estate funds, click here.