Many emerging managers assume their fund administrator handles "everything back-office," then discover gaps when audit season arrives or an LP asks a question no one owns.
What Typically Falls Within the Administrator's Scope?
Fund administrators generally handle the execution layer of fund operations. Core responsibilities often include:
Fund accounting: Maintaining the general ledger, recording investment transactions, and tracking assets and liabilities
Capital activity processing: Preparing and coordinating capital calls, processing contributions, and managing distributions
NAV and allocation calculations: Computing net asset value and applying partnership allocation methodologies per the Limited Partnership Agreement (LPA)
Investor reporting: Generating Partner Capital Account Statements (PCAPs), quarterly financials, and performance metrics
Investor portal management: Maintaining secure access to K-1s, capital notices, and fund documents
Regulatory support: Assisting with FATCA/CRS reporting, AML/KYC compliance during investor onboarding, and Form PF data gathering
Many administrators also offer audit liaison services, tax preparation support (including K-1 distribution), and management company accounting — though these may be priced as add-on services or bundled differently depending on the provider.
What Often Stays With the CFO Function?
Fund administrators execute processes, but strategic decisions and certain oversight functions typically remain with the GP. Whether handled by an in-house CFO, an outsourced CFO, or a fractional finance professional, these responsibilities commonly include:
Capital call strategy: Determining timing and amounts based on deal flow, IRR considerations, and subscription line usage
Valuation conclusions: While administrators may compile supporting data, final valuation decisions often require GP judgment and valuation committee oversight
Waterfall interpretation: Complex carry calculations and LPA provisions may require legal counsel or CFO-level review
Audit and tax strategy: Even when administrators handle day-to-day liaison work, overall audit oversight and tax planning decisions often remain with the CFO function
LP relationship ownership: Handling investor questions that require context beyond standard reporting
Management company oversight: Budgeting, financial forecasting, and GP-level planning, though some administrators offer management company accounting support
How Is the Relationship Typically Structured?
Designating a single point of contact, often a CFO, outsourced CFO, COO, or senior finance team member, tends to streamline communication. Many administrators assign dedicated client contacts, creating a two-way accountability structure.
The first reporting cycle is often a calibration period. Establishing expectations around deliverable formats, review timelines, and escalation paths before tax season tends to reduce friction when deadlines compress.
Institutional LPs increasingly expect managers to engage reputable administrators early. Many conduct operational due diligence that includes reviewing the administrator's SOC 1 Type 2 certification and understanding the GP's oversight model.
Where Does Overlap Create Confusion?
Gray areas often emerge around waterfall modeling, management fee calculations, audit support scope, and bespoke investor reporting. A clear division documented during onboarding, ideally referencing specific LPA provisions and service agreements, helps prevent assumptions from becoming audit findings.
Understanding what fund administrators typically handle, and what commonly remains with the CFO function, allows first-time fund leaders to structure relationships that scale.