Fund Administration and Technology, Finding the Right Balance.

Think about 1995. Although it might be difficult to remember — a lot has happened since then. That was the year that Microsoft launched Windows 95 and ushered in with it an era of productivity and connectedness that has no end in sight.

Easy access to the internet and an easy-to-navigate operating system were just two of the technological revolutions in recent history. Next came mobile connectivity and social networking. Now, fund managers and administrators can communicate across teams and channels to quickly solve problems and accelerate growth.

So besides personal computers and smartphones, what role does technology play in fund administration? We’ll dive into the elements below, how technology helps, and whether it’s enough.

Elements of Technology Necessary to Fund Administration and Management

At one time, general partners (GPs) depended almost exclusively on Excel and hard copy reports to manage a fund. But with regulation, security needs, competition, and investor demands continuing to escalate, the need for more robust technology for fund administration has never been more apparent.

From automation to data analytics, here are two of the main elements of technology needed for today’s fund administration.

Automated Accounting Software

Accounting processes are most accurate and efficient when they can be automated. The best software automates fund transactions, performs waterfall calculations, and distributes investor notices. It could provide easy access to IRR analyses, ILPA reports, and other out-of-box budget reports.

Customizable Reports

Imagine spending hundreds of thousands of dollars for analysts whose sole job is to manage Excel spreadsheets and send reports out on a weekly, monthly, quarterly, and annual basis. Is that necessary, or even, feasible in today’s market? The answer is an overwhelming NO. Technology can make reporting faster, easier, and even better.

With the right technology, reports can be customized to drill down and show the exact data you need for each audience, whether it’s for regulators or LPs. Features might include an integrated general ledger and a central location where reports are tracked and benchmarked.

How Does Technology Help?

Back in 1995, businesses were just getting started using computer software to help manage day-to-day processes and create efficiencies. Since then, the role of technology has increased exponentially, especially in the realm of finance.

For fund administrators, technology is essential to several key functions:

Accurate and Efficient Accounting

The demands placed on fund administrators are simply too great to depend on manual processes alone. Accounting software makes it possible to provide full audit trails and ensure posting accuracy.

Cutting-edge technology saves time, too. Automated SWIFT banking transactions, for instance, are transforming fund accounting from manual, double-entry processes into efficient time-savers.

Digital Reporting

Long ago, LPs had to wait to receive periodic fund reports as printed hard copies, or at best, PDF files. That is no longer the case today. Technology has empowered fund administrators to provide critical information—like investment return calculations—on digital platforms anytime, 24/7.

Transparent Data

Not only do funds need efficient data entry, but they also desperately need transparent, accessible data to comply with regulations and reporting needs. A heavy emphasis is now placed on granular details underpinning both performance and compliance. With technology, partners can now expect customizable online portals so they can sift through raw, real-time data.

Streamlined Communication and Relationship Management

Gone are the days when GPs had to spend considerable time and effort communicating with all investors. Technology has now made it possible to streamline and automate investor communications from a single platform as well as manage contacts and document permissions.

Forecasting and Financial Modelling

Leveling up on the technology front brings us to the more complicated, nuanced aspects of  fund management: helping to ensure future growth. Believe it or not, technology can assist with that, too, by enabling fund administrators and managers to provide forecasting and financial modeling on a more accurate and consistent basis.

Is Technology Enough?

Despite the critical role of technology in today’s fund administration and management, human beings are still crucial for creativity, client engagement, and complex problem-solving —in short, trust. Technology will never replace good people because only good people can foster trust. That’s where experienced and readily accessible partners come into play.

Get Access to the Right Technology…and the Experienced Partners

Technology has enabled funds to keep pace with today’s regulatory and investor demands for transparency and automation. From customized digital reports to streamlined communication and automated accounting processes, technology delivers. The other part of that equation — a trusted partner — means that you’ll be able to fully leverage technology while still investing in the best human capital you can find.

If you’re looking for an experienced partner that brings cutting-edge technology to the table, look no further than Reliant Fund Services. You can trust us to bring industry-leading software so you can compete in today’s marketplace with flexible, detailed reporting and automated back-office functionality.