Demand outlook for alternative fund administration bullish

Financial pundits positively forecast that market forces are fast becoming partial to a bullish outlook in alternative fund administration as trends in the asset management industry head in the direction of growth. 

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Topping the factors for expansion are the revised regulatory reporting requirements, e.g., AIFMD, Solvency II, and Form PF, that turn to be more stringent brought forth by series of huge financial misdemeanors by so-called leaders in the industry. 

There is likewise the ballooning hike in assets under management (AUM), which is anticipated to go beyond $900 billion in the succeeding year. The alternative fund administration industry has the potential to ensnare cumulative returns not lower than two-thirds of this amount. Moreover, industry reports state the U.S. addressable market for private equity administration to be at more than 70 percent of invested capital, which runs to $1.7 trillion. Though private equity outsourcing is currently at 30 percent, if developments in the realm of high finance remain stable, a 50 percent level by 2018 is a promising outcome. The preceding years’ financial crunch as well as on the insistence of institutional investors drive asset managers toward cost-efficient operations. Hence, alternative fund administrators are equally challenged to develop novel services models that would spell minimization of risks and expenses amidst maximized profit targets. 

As these trends progress, the pressure on alternative fund administrators is to present lucrative options depending on financial variables such as size, ownership structure, and service mix. To wit, small capitalized administrators may zero in on the enhancement of their core competencies towards streamlined but cost-efficient operations. 

On the other hand, administrators with bigger and more stable capital at their disposal are expected to be more aggressive in the market and pursue strategies that would ensure shareholder value creation while concurrently sustaining competitive advantage. 

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PartnersAdmin LLC was established in July 2008 with the intent to provide a quality, outsourced solutions to meet the dynamic back office needs of the alternative fund industry. Scott Tominaga is its Chief Operating Officer. To learn more about the company, visit this website.

A closer look at fund administration

Funds administration refers to the set of services provided in support of the running of a fund. Types of funds include hedge funds, mutual funds, pension funds, unit trusts, and other similar funding structures. 

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The way fund administration works is that services get outsourced by the fund manager to third-party companies that specialize in providing these non-core services. These external, specialist firms are commonly known as fund administrators, while the funds administration industry refers to the umbrella group of companies providing these support services. 

The administrative functions of fund administrators may include both fund accounting and the job of a registrar or transfer agent. The typical services provided by fund administrators include the calculation of Net Asset Value (NAV), preparation of semi-annual and annual accounts, maintenance of the fund's financial books and records, reconciliation of daily and monthly broker statements, payment of the funds expenses, pricing the portfolio of the fund, calculation and payment of dividends and distributions, and provisions for compliance and anti-money laundering reporting and monitoring. 

Functioning primarily as a registrar or transfer agent, a fund administrator works on the provision of shareholder services (including processing of subscriptions and redemptions to the fund), maintenance of the funds shareholder register, and correspondence with investors for monthly statement provisions, ad hoc notices, etc. 

Note that generally speaking, there are two core activities that the fund manager undertakes which could not be outsourced to a third-party fund administrator. These are portfolio management or investment decision-making and the sourcing of investors for the fund. 

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PartnersAdmin LLC’s team of experts has the hands-on experience necessary to solve the challenging operational issues faced by alternative funds. For similar reads, visit this blog.

Precursory report on venture capital funding

A venture capital fund is a kind of investment fund that pools financial capital from investors and is invested in startups and small to medium-sized companies. It is usually characterized by high risk yet high returns. 

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This type of fund is often managed by venture capital firms employing enterprise experts whose research and analytical skills determine early-stage investment potentials and methods for growing promising companies. The private equity aspect of this type of fund usually entitles the investors to stakes in the company, frequently putting in not only capital but also skills. 

A lot of times promising entrepreneurs and startups rely on venture capital funding for the early stages of company development. More often than not, they don’t have direct access to market capital and bank loans. Through opportunities where equity is exchanged for funding, they realize their growth potential. 

Venture capital funds that primarily support these relatively risky businesses curiously differ from other investment vehicles but might share similarities with them as well. Compared to popular pooled investments like mutual and hedge funds, venture capital funds deal with a financially risky early developmental stage. That is the same reason it is different from buyout private equities, which take on platforms with assured revenue. The active role played in the investment by providing resources beyond the capital also establishes its difference. 

Limited partners that invest in venture capital funds are part of a structure consisting of high net worth companies and individuals with the capability to spare large capital for investment purposes.

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Founded in 2008 and based in Carlsbad, CA, PartnersAdmin LLC is SSAE16 Type II-certified and delivers a complete set of general ledger-based accounting solutions for its clients through its web-based platform. To know more about the company and the alternative investment industry, visit this blog.

Demystifying The Workings Of a Family Office

The first family offices opened in the late 19th century. To this day, the family office is a hallmark of super-wealthy households. But what are family offices?

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Family offices are fundamentally private investment offices that aim to manage the often complex affairs of high net worth households. Although industry experts are divided on what services a family office must deliver clients, almost all of them are started with the expressed purpose of managing a family’s investment options.

Growing and maintaining wealth is the crux of many family offices. The typical services delivered by a family office go beyond mere wealth management. Many experts recognize an all-in-one roof approach to finance and investing, encompassing tax compliance, private banking and private trust services, document management and recordkeeping, and budgetary and bookkeeping functions. 

Managing the financial affairs (including financial education) of the family may also fall under the family office’s work. They may also take on a concierge function for their clients, doing everything from booking appointments to facilitating meetings between members of the family.

Because they manage the affair of no more than a few families at a time, they aren’t as regulated as hedge funds or other similar financial institutions. Often, billionaires choose them specifically to avoid excess oversight.

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They are, however, very costly. Hence most family offices cater to a billionaire clientele with long-established fortune whose immense assets would warrant the need for specialist services. Because of their complexities, family offices cannot rely solely on run-on-the-mill software solutions, instead relying on specialists both in-house and outsourced to manage their systems.

Scott Tominaga's company, PartnersAdmin, provides a host of financial management services for family offices and other institutional investors. Visit this website for more information.