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CrediTrust Fiduciary Group
Guide for Fund Administration
Understanding Fund Administration:
A Comprehensive Guide
Fund administration is a rapidly growing industry, estimated to be worth between USD 8 billion and USD 12 billion. The industry experienced significant growth following the 2008 global recession, as alternative investments such as hedge funds, real estate, fund of funds, mutual funds, pension funds, private equity, and venture capital gained popularity. This influx of funds into these sectors has driven increased demand for fund administration services.
What is Fund Administration?
Fund administration is an outsourced service that involves the execution of middle-office and back-office functions by a third-party provider. Fund administrators independently verify fund assets and valuations under a manager's portfolio, allowing asset and fund managers to focus on portfolio growth and management.
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Key Functions of Fund Administration
- Transaction Processing:
- Trade and related transactions
- Withdrawals, transfers, and switches
- Daily corporate actions
- Accounting and Reporting:
- Preparation and maintenance of book of accounts
- Financial statement preparation
- Regulatory reporting
- Profit and loss reporting
- Tax reporting
Investor Services:
- Processing of client (investor) documentation
- Preparation and maintenance of investor register
- Distribution of dividends and investor statements
- Share registrar and transfer agent services
- Performance and Fee Calculation:
- Computation of track investments and performance fees
- Calculation of net asset value (daily, weekly, monthly)
- Tracking of return of capital and return rates
Fund Formation Solutions:
- Consultation on ideal fund structure
- Drafting of constitutional documents
- Corporate services (bank account opening, tax registration, etc.)
Legal Services:
- Organization of board and shareholders meetings
- Preparation and review of statutory and legal documents
- Assistance in liquidation and re-domiciliation
Compliance Services:
- Appointment of an anti-money laundering officer
- Establishment of internal AML protocols
- Sanctions list screening
- Risk-based approach in monitoring financial activities
Crypto Fund Administration
With the rise of digital assets, fund administration has expanded to service cryptocurrency funds. Crypto fund administration relies heavily on technology and includes:
Crypto Fund Set-up and Launch
- Processing of transactions through exchange ledger and wallets
- Preparation of books of accounts
- Computation of interest charges
- Calculation of profit and loss
- Reconciliation of hot/cold wallet transactions
Compliance & Reporting Services
Fund administration plays a crucial role in supporting the investment industry by providing essential services that enable fund managers to focus on their core competencies. As the industry continues to evolve, fund administration firms must adapt to new technologies and regulatory requirements to meet the changing needs of their clients.
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