Contrary to what political cartoons would have you believe, managing a fund is not all sitting around in corner offices, smoking cigars, and shouting “buy!” and “sell!” into a phone. Safeguarding and nurturing a collective investment scheme to ensure healthy growth takes patience, savvy, and more time and different skills than any human being can bring to bear. To make sure the fund gets the time and expertise it deserves, fund managers hire fund administrators to handle all the aspects of stewardship needed to keep a hedge fund, mutual fund, pension fund, or unit trust prosperous and profitable for all its investors. Any wise fund manager will tell you knowledge is power, so here is some advice on how to excel as a fund administrator.
Everything in its Place
Fund Management is about strategy and vision, while fund administration is about enabling that vision by keeping the fund’s information up-to-date and accounted for. So a good fund administrator should stay on top of “fund accounting” duties. Before everything else, a fund administrator should calculate the net asset value, both of the fund’s income and expense accruals relative to the pricing of securities at the standing market values. It’s the administrator’s job to provide management with all the pertinent information they need, so keeping, updating, and filing the fund’s books is of paramount importance. Always try to reconcile holdings with broker records and custody records, to avoid discrepancies which could lead to a mistake when investing. The administrator should also know when and how to pay dividends to shareholders.
Proper recordkeeping requires professional printing, so many successful fund administrators’ contract financial and specialized printing services to publish and collate any financial reports. Such services can also provide virtual data rooms with all the necessary document security to ensure only the fund manager and those with proper permissions see any sensitive information.
Dealing with the Government
To keep everything at a fund functioning smoothly, administrators must bear the brunt of dealing with regulatory arms of the government, such as the Securities and Exchange Commission (SEC). A fund whose profits and actions are not properly logged with and monitored by the SEC will be more closely scrutinized or even penalized, so administrators must perform all the due diligence to ensure such organizations are satisfied and all business dealings correctly filed away. If regulators have no reason to interfere with a fund, that fund’s stewards have more time to plan a successful governance strategy for its future.
Printing services once more come in handy, as specialized firms in New York and other financial hubs employ experts in SEC filings, XBRL, EDGAR filings, and EDGAR solutions. If the administrator’s job is to make the manager’s life easier, then printing services make the administrator’s life easier. Any good administrator will use all the tools in their arsenal, delegating to printing and filing specialists the same way managers delegate the fund’s general recordkeeping to administrators.
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