Much like Alternative Fund Managers themselves, the fund administrators who work with them have had to learn how to grow and evolve with an ever-changing market.
Before the Tax Payer Relief Act of 1997 repealed the so-called “Ten Commandments of Offshore Funds” most fund administrators had their main service offices in places like Bermuda, the Cayman Islands and Curacao. Clunky spreadsheets and stock price quotes from newspapers were used to calculate NAVs and statements were distributed to investors by “snail mail” or fax. Fast forward to 2025 and it raises the question, “Is my fund administrator growing with me?”.
Growth is a tricky word. Fund administrators are generally judged on the size of assets under administration or the number of managers and funds we work with. While those numbers are important, and could be an indicator of growth, what might be a better judge of growth is how the work is being accomplished.
During my tenure with STP, not a day has gone by where a prospect hasn’t asked us about the various accounting, reconciliation, investor and reporting systems we are using. “Can you handle online subscriptions?”, “Does your accounting and reconciliation tools accommodate multi-prime scenarios?”, “Is reporting done through a website?” are all common themes when a manager is doing their due diligence on us. The answer to all of these is “Yes”, by the way.
What managers are not asking us and what we are doing behind the scenes, however, is the true sign of growth. We have implemented sophisticated project management tools to help streamline internal procedures. We work with AI tools to help answer some of the left field questions we get from managers and their investors. We consult with subject matter experts in the legal, accounting, cybersecurity and institutional consulting firms (amongst others) to make sure we are addressing the latest trends and concerns in the industry. We advance hire for our service teams to be ready for those last-minute projects, launches, SEC rule changes, etc., that could hit our respective desks at any time.
When measuring growth, numbers alone are not the only factor to consider. True growth is reflected not just in increasing assets or client numbers, but in the continuous improvement of the processes, systems, and expertise that support those numbers. It’s about agility and adaptability, ensuring that as the regulatory landscape shifts, technological advancements emerge, and client expectations evolve, your fund administrator is always a step ahead. So, as you evaluate whether your fund administrator is growing with you, ask yourself: Are they investing in innovation? Are they anticipating future challenges and preparing for them today? A truly forward-thinking administrator doesn’t just respond to changes—they drive them, ensuring that your fund can thrive in an increasingly complex and dynamic market. In the end, it’s not just about keeping up—it’s about staying ahead.