Glossary · Operations and rules

What is a fund administrator?

A fund administrator is an independent firm that keeps a fund’s books, calculates its net asset value, processes capital calls and distributions, and handles investor reporting.

In practice

Administrators are appointed by the GP and paid from fund expenses, with duties set out in a services agreement. Scope varies: many also run investor onboarding, AML and KYC checks, and the preparation of financial statements and tax filings such as Schedule K-1s. The role is often confused with the auditor or custodian, which are separate appointments.

An example

Round numbers, not a real fund

Say a manager sends a capital call for $50 million. The administrator works out each investor’s share, issues the notices, tracks the cash arriving and records it.

Why it matters

Investors rely on it as a check on the manager, so its independence and accuracy matter.

In the news

Related terms

NAVNet asset value, or NAV, is a fund’s assets minus its liabilities. In private funds it is usually reported quarterly and rests on the manager’s valuations.
Capital callA capital call is a notice asking investors to send part of their commitment, usually a week or two before the money is needed. It is also called a drawdown.
AML and KYCAML rules aim to stop money laundering. KYC, know your customer, is the checking of who an investor is and where its money comes from before a fund accepts it.
Schedule K-1A Schedule K-1 is the U.S. tax form a partnership, such as a private fund, sends each partner to report that partner’s share of its income, gains and losses.
Fair valueFair value is what an asset would fetch in an orderly sale between willing buyers and sellers on the measurement day. Accounting standards require funds to report it.

The terms, in the news each morning.

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