Service Level Agreement Fund Administration

However, not all general partners see that this value is being realized. According to Preqin, 23% of general partners have changed fund managers for cost reasons. More and more investment managers are outsourcing the management services of their onshore funds, which makes especially sense if the structure is a master feeder or a mini-master feeder. The selected administrator must be able to manage, ideally, the partnership allocations on the basis of book and tax. A good next step is to develop a responsibility matrix with your administrator. It is a document that describes who is responsible for each daily/weekly/monthly/annual function. Implementation of a Service Level Agreement (SLA) is also a very good idea. Like a liability matrix, an ALS will also define agreed responsibilities and outcomes. Was the one-size-fits-all service package or was it tailored to your company`s requirements? If a fund administrator is able to adapt the service proposal, you can eliminate unnecessary services (and associated costs) or replace them with alternative services that meet their needs and offer added value. Look for fund administrators who offer formal Service Level Agreements (ASS) and are willing to tailor your ALS to the specific requirements you or your investors may have. As regulatory and reporting obligations have been strengthened, the cost of the back office for General Partner has increased, whether they choose to manage funds internally or outsource the function. There are several advantages to hiring an independent director. The obvious advantage is independence, a major concern for many investors.

More and more investors are looking for the outsourcing of the administration to a qualified administrator acting independently of the manager. By outsourcing the back office, the investment manager is also able to focus on his core skills, manage the money and get positive returns. By outsourcing administrative work, the investment manager is able to reduce the fixed costs of the management company by minimizing infrastructure costs. All management fees are paid through the fund and are not paid by the management company, unlike what the manager does in-house, so the management company bears the costs. Is pricing based on managed total (AUM)? In this case, this pricing structure could exceed the value of the services provided to cover costs, particularly when THE AMMs are primarily in an easy-to-manage fund strategy. If the costs are sufficient to trigger a change of service provider, the problems will likely be related to the value the general partner receives, not just the difficult costs.

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