Asset managment academy

The Funds Industry

What is the Funds Industry?

Getting into the funds industry is seen as the Holy Grail for many financial professionals – even seasoned investment bankers from top-tier institutions find it hard to get a foot in the door.  This consists of Front Office, Middle Office, and Back Office roles as follows:


Where does Fund Administration fit in?

Essentially, a fund administrator is an outsourced third-party service provider that protects the interests of investors by independently verifying the assets and valuation of the fund. By outsourcing the fund administration function, fund managers are allowed the freedom to focus on portfolio management internally. Typically, fund administration comprises 3 parts:   

Investment Administration (Fund Services) Fund Accounting Unit Registry (Transfer Agency)
Unit Pricing Financial Statements Client contact centre
Valuation Business activity statements Client reporting
Custodian monitoring & instructions Fund audit facilitation Client transactions
Corporate actions Distribution


Why Should I Consider Fund Administration?

Although many responses may be”I prefer buy-side” or “I’m keen for front office roles“,  the pace of hiring in fund administration is at an all time high – and it is from here that one can gain a foot-in-door to middle and front office roles. Due to investor demands for greater transparency, regulatory pressures and technological requirements, the industry is experiencing rapid growth, with increasing number of opportunities opening up globally. In fact, according to Funds Partnership statistics, 70% of talent demand comes from fund administration.

How does Fund Administration differ across Asset Classes?

Fund administration across different asset classes can differ substantially due the nature of investment activity and can be complex, depending as fund management does it does on strategy, structure and volume. For example, private equity, hedge fund, real estate managers require different services and therefore specialist capabilities are vital to the smooth operation of a fund. Partnering with an independent specialist with true expertise in both the fund’s asset class but also with in-depth knowledge and understanding of the fund’s jurisdictional regulation wherever it may be located in the world can truly impact the success of a fund.  

The traditional role of a fund administrator includes the following services:

  • Daily, weekly and monthly Net asset Value calculation (NAV)
  • Calculation of the fund’s income and expense accruals and the pricing of securities at current market value
  • Financial reporting
  • Financial statement preparation and audit liaison
  • Opening and control of fund bank accounts
  • Preparation of reports to shareholders
  • Reconciliation of the broker, custodian, bank and investment manager statements
  • Accounting services; maintenance and filing of the fund’s financial books and records
  • Payment of fund expenses
  • Settlement of daily purchases and sales of securities, ensuring collection of dividends and interests
  • Calculation and payment of dividends and distributions to the transfer agent
  • Preparation and filing of local regulatory body filings/reports
  • Pricing the portfolio of the fund
  • Calculation of the total returns and other performance measures of the fund
  • Compliance and anti-money laundering monitoring and reporting
  • Supervision of the orderly liquidation and dissolution of the fund (if required)

Am I suited for this career path?

Are you detail-oriented? Do you have a basic understanding of the investment market and accounting? Do you thrive working in a fast-paced environment and are able to meet strict deadlines?  Do you enjoy working in a team environment? If the answer to all of these questions is ‘Yes’ then fund administration could definitely be the role for you! Teamwork and collaboration to support all team members particularly during busy month-end periods will be necessary.

FP-Training 2020