Who is a Fund Administrator? Definition, Role & Responsibilities in Singapore
A fund administrator is an individual or firm that manages the back-office operations of an investment fund, including hedge funds, private equity funds, venture capital funds, and unit trusts. In Singapore, the fund administration industry is growing rapidly, driven by increasing demand for transparency, accurate reporting, and regulatory compliance. A fund administrator’s responsibilities span from fund accounting to net asset value (NAV) calculation, tax reporting, and investor servicing. Let’s dive into the responsibilities of a fund administrator in detail.
Fund Administrator Responsibilities: What Does a Fund Administrator Do?
A fund manager is responsible for a wide range of fund administration services, such as:
- Offering investor service
- Fund accounting services
- Maintaining the investor capital account
- Financial reporting
- Regulatory reporting for funds
- Capital call
- Shareholder services for funds
Fund Administration Services in Singapore: A Growing Industry
Singapore is one of the major fund administration centers in Asia with strong infrastructure and favorable environment for regulation. In Singapore, both local and international fund administrators provide a full range of services, including providing custody services, calculation of NAV, and compliance monitoring, as well as support of fund governance. Now that Monetary Authority of Singapore (MAS) has stepped up the transparency and compliance rules, firms are increasingly delegating fund administration to specialist providers.
Investment in a reliable partner for fund administration makes smooth operation, accurate record keeping, and the compliance of the MAS regulation possible for whoever manages a mutual fund, hedge fund or a venture capital structure. This trend is set to increase given that the fund managers will be paying more attention to the portfolio strategy and less concern with the operational burden. Knowledge of the significance of an educated fund service provider can create or shatter your investment vehicle’s long term success.
Choosing the Right Fund Administrator in Singapore: Key Considerations
Given the crucial role of a fund administrator, choosing the wrong person for the job can be suicidal for any business. Fortunately, you can use these tips to make the proper selection.
- Keep in mind that sometimes cheap is expensive. Therefore, instead of only focusing on the price they are charging you, consider other things. For instance, think about the years of experience and the reputation in your industry.
- Choose a popular fund administrator to attract partnerships with people who can only if a third party is involved in the administration. It also attracts investors who don’t like investing in a first-time fund.
- Talk to his previous or existing clients to learn more about their experience with the fund administrator before settling for him.
- The fund administrator should also have strategies for incorporating technology. It would be a bonus for him to have platforms suitable for investors and customizable to fit various needs.
- Identify the process he practices during service delivery. Look out for his adherence to the previous service-level agreement (SLA). Find out if the onboarding process is documented and how well it is done. Investigate if they carry out meetings and status calls and, if yes, how often.
- Find out if they are compliant with the System and Organization Controls (SOC) Type 2 compliance. If yes, that’s a plus as it indicates having passed an audit of its internal operations. The audit checks if these operations manage client’s data in the right way. The parameters include privacy, confidentiality, processing integrity, availability and security.
Benefits of Hiring the Right Fund Administrator or Fund Manager
If you hire right, the fund manager will lead to several benefits. They include
- Reducing risks
- Increasing your focus on the sourcing and management of investments
- Improving your reputations
Risks of Choosing the Wrong Fund Administrator for Your Fund
Getting it wrong when hiring a fund manager also has dire consequences. Check them out!
- Hindrance to the scalability of your firm
- Disruption of operations
- Adverse effect on investor relations
- Jeopardizing compliance
Understanding the Different Types of Fund Administrators and Their Specializations
Fund administrators are not one-size-fits-all; They vary depending on the types of funds they cater for as well as services that they specialize in. A fund administration firm in such a global financial metropolis as Singapore normally customizes their services based on asset class and client requirements.
The administrators of hedge funds are concerned with real-time pricing, complex determination of NAV, and management of high-frequency trading data. Private equity fund administrators are experts in capital calls, waterfalls, and dealing with the illiquid assets for longer holding periods. Administrators of mutual funds provide a large volume processing, daily report of NAVs, and retail investor-specific shareholder services. Meanwhile, administrators of venture capital funds manage startup valuations, onboarding of investors, and performance analyses in the course of several funding rounds.
Specialised administrators may also provide niche services, including regulatory compliance reporting, transfer agency services and MAS-aligned fund governance which is provided to support. Depending on the structure of your fund, the jurisdiction, and the order of complexity of your business, you will have to choose the right kind of administrator. This knowledge of such specializations assists fund managers in Singapore when selecting their partners, who can match their strategy and regulatory requirements, thus making the operations of funds to be efficient and compliant.
Conclusion
It is evident that a fund manager plays a huge role in a business. He does crucial roles that can make the company thrive and become successful. Therefore, there is also a need to choose the best. While selecting, consider the factors discussed above to settle for a suitable fund manager. Remember that choosing right has its benefits, whereas choosing wrong has its consequences.
