Fund Administration
Mark Doran
40 years: Fund management
In this video, Mark explains the administration process involved in running an investment fund. Additionally, he explains the roles that these individuals play both inside and outside of Asset Management firms, as well as what their responsibilities are.
In this video, Mark explains the administration process involved in running an investment fund. Additionally, he explains the roles that these individuals play both inside and outside of Asset Management firms, as well as what their responsibilities are.
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Fund Administration
13 mins 26 secs
Key learning objectives:
Outline the roles of the asset management administration team
Understand what some of the external parties do
Overview:
Asset managers invest on the behalf of other companies or individuals. To ensure they operate effectively they’ll have a team around them to help with the administration process. They need to ensure that assets are correctly valued and held safely, trades are settled, financial statements are prepared and that there is an up-to-date record of ownership of the fund. Some of these responsibilities are outsourced to other companies, but the responsibility always remains with the asset manager.
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What is the role of the asset management administration team?
The administration team is there to ensure that the asset managers can undertake their role as smoothly and effectively as possible.
Roles:
- Calculate the NAV of the fund, crucial for investors to be able to make effective decisions
- Reconcile broker, custodian, bank and investment manager statements
- Check the settlement of daily purchases and sales of securities
- Collect dividends and interest
- Confirm trades with brokers
- Ensure financial statements are correctly prepared
- Ensure an up-to-date ownership record of the fund
- Make payments to investors of distribution funds
- Deal with the opening of new funds and the closing of old ones
What is the administration process?
One of the roles within the administration process that is outsourced is the role of the transfer agency.
The transfer agency has several roles:
- Keep a record of the investors’ holdings in the fund and when shares are bought and sold
- Maintain investors records
- Fee collection and dividend payment
Another organisation employed by asset managers is a custodian, this is the organisation responsible for safekeeping investors assets. The custodian may have a different name depending on where in the world you are based.
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