Fund administration Totally Explained

Everything about Fund Administration totally explained

Fund administration is name given to the set of activities that are carried out in support of the actual process of running a collective investment scheme, whether the scheme is a traditional mutual fund, a hedge fund or something in between.
Managers of funds often choose to outsource some or all of these activities to external specialist companies; these companies are often known as fund administrators.
These administrative activities would include:

Calculation of the Net Asset Value (NAV) including the calculation of the funds income and expense accruals
Preparation of semi-annual and annual accounts
Maintenance of the fund's financial books and records
Payment of the funds expenses
Calculation and payment of dividends and distributions (if required)
Supervision of the orderly liquidation and dissolution of the fund (if required)

This list isn't exhaustive and particularly where a fund manager has chosen to outsource some of these tasks to an external company some or all of the administrative activities of the fund may or may not be described as "fund administration". Specific activities that definitely don't fall under the name of fund administration are those directly associated with the business of running a collective investment scheme:

Gathering assets (for example seeking additional investors into the fund)

Asset management (for example deciding how to spend the money that investors have put into the fund in order to obtain the best return for that investment) In the view of some fund managers any task necessary for maintenance of the fund that doesn't fall into one of the two categories above could be classed as fund administration and could potentially be a candidate for outsourcing.

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