Fund Administration

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

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.

Key learning objectives:

  • Outline the roles of the asset management administration team

  • Understand what some of the external parties do

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Summary

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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Mark Doran

Mark Doran

Mark Doran is an independent Trainer and former Trader at Bank of Montreal and HSBC. He was Non-Executive Director on the Risk Committee for an Asset Manager for over 5 years. Started delivering Financial Markets training over 20 years ago and now runs his own private investment portfolio. His area of expertise include Investments, Trading, Risk and Operations as well as owning a private investment company.

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