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Hedge Fund Administrators

The Job

“Hedge fund administrators play a critical role in the operations of a hedge fund by driving efficiency and building the credibility of a hedge fund,” according to Evolving Demands on the Hedge Fund Administration Industry, a report from Capgemini, a provider of consulting, technology, and outsourcing services. [They] “may be the key to enhancing the efficiency of hedge fund (HF) operations. The convergence of operational knowledge gained from the experience of working with multiple hedge funds and the scale of operations due to consolidation of HF administrators has enabled them to deliver critical services to hedge funds efficiently.”

Administrators perform a variety of middle- and back-office duties, including: 

  • Working closely with HF managers during the launch and set-up of new funds
  • Providing monthly or quarterly accounting of investor contributions and withdrawals and computing profit and losses for the accounting period
  • Monitoring daily and weekly cash-flow reporting
  • Preparing semi-annual and annual reports for fund investors
  • Settling daily purchases and sales of securities
  • Calculating net asset value, management fees, and performance fees and preparing statements that summarize this information
  • Handling subscription documents
  • Liaising with the hedge fund’s valuation and operations teams regarding fund transactions and activities
  • Handling monthly fund transactions (e.g., interest calculation, investor subscriptions, invoice payments, expense accruals tracking, etc.)
  • Providing real-time asset valuation and independent valuation of portfolios
  • Providing risk management services that help hedge funds avoid losses from highly leveraged trades and fraud
  • Collecting and preparing data for regulatory filings with the Securities & Exchange Commission and other regulatory bodies
  • Acting as the registered agent and registrar for offshore hedge funds
  • Carrying out anti-money laundering due diligence with regard to investors
  • Ensuring that the fund complies with the terms of its offering memorandum
  • Overseeing the liquidation and dissolution of the fund (if necessary)
  • Maintaining and updating financial data in investment databases
  • Reconciling all cash received from investors and investments
  • Assisting in compliance monitoring and control
  • Working closely with external and internal auditors during year-end reporting
  • Preparing ad-hoc analytics for existing and potential clients
  • Preparing tax returns according to prescribed rates, laws, and regulations