Strategic Benefits of Outsourcing Fund Administration

By Krista McCoy, EVP, Chief Business Development Officer, ULPFS

Making the decision to outsource Fund Administration services is one of the most important decisions that a Fund Manager can make; increasing time and efficiencies both for themselves and for their investors.

In recent years, outsourcing fund administration has become widely accepted as an industry standard. Traditionally, most Fund Managers opted to keep fund administration in-house. Yet, the growing volatility, uncertainty, and complexity of the fund world and investor expectations has made self-administration a mounting distraction. The increasing complexity of fund types and structures is taxing manager resources and expertise, while more sophisticated investors are driving the demand for independence and continued investments in technology, controls, and transparency. Outsourcing allows Fund Managers to focus on the people, process and technology needed to tackle the evolving financial reporting requirements and expectations of funds and their investors.

Strategic benefits of outsourcing: People, Process, Technology, Capacity to Focus.


Relationships and communication are the foundation for a successful Fund Administration partnership. Making the right Fund Administrator choice is essential. Cultural fit, technical ability and capacity are all critically important; a Fund Manager is not just partnering with a Fund Administrator, they are partnering with the human capital of the firm. The goal of a Fund Administration relationship is a long-term partnership that grows and flexes with a Fund Manager’s needs. Fund Administrators should be viewed as an extension of the Fund Manager’s team, a strategic partner, and a valued part of the business plan.


Limited Partners are growing in sophistication and requiring more of Fund Managers, notably tighter processes and controls. Many institutional investors require the Fund Manager to hire a Fund Administrator with industry accepted credentials. The most sought-after credential is the SSAE18 SOC 1 Type 2 Audit Report (System and Organization Control Report). The SOC 1 report confirms that a Fund Administrator has the proper controls and procedures in place to reduce risk when it comes to potential errors. Limited Partners also focus on both the Disaster Recovery and Cybersecurity Policies. The chosen Fund Administrator should have documented and tested Disaster Recovery and Cybersecurity Policies, as well as Business Continuity Plan, which lays out the process for continuous service and access to client data in the event of disruptive events.


In 2020, private equity firms are relying on robust technology products for accuracy and instant responses. Technology has both tangible and intangible benefits, which is why it is essential that all fund services are delivered through industry leading platforms.

Fund Administrators understand how crucial technology is to offering and maintaining reliability to their clients; having enhanced software and analytics specific to the alternative investment industry is paramount. Platforms such as Investran, eFront and VPM allow data to be tracked and maintained securely. Using a secure, sophisticated platform not only minimizes the risk that can be found using excel spreadsheets, it also allows for transparent and secure reporting. The data input and output are performed in a more controlled and reliable environment through these platforms. Access to state-of-the-art investor portals, allows Fund Administrators to store and distribute investor correspondence through a secure web-based platform. These portals allow access to online real-time data and reporting to Fund Managers, General Partners and Limited Partners. The cost to individual managers of investing in the right technology can be expensive and overwhelming. Partnering with a Fund Administrator who invests in these platforms allows Fund Managers access to advanced technology while avoiding much of the cost, process and time-commitment of in-house implementation and on-going maintenance.

Capacity to Focus

Outsourcing Fund Administration enables managers to focus on core responsibilities: deals and investment strategies. Managers who divert focus from portfolios and investments to manage the reporting requirements mandated by the LPA face an ever-increasing challenge. Choosing to outsource allows Fund Managers to focus on what they do best – investing. Outsourcing allows Fund Managers to focus on providing a maximum return on investments for their investors, concentrating resource and expertise in evaluating and making deals, investing and implementing unique investment strategies.

Making the decision to outsource Fund Administration services is one of the most astute decisions a Fund Manager can make; increasing efficiencies both for themselves and for their investors. As reporting demands grow, the need for transparency increases and the importance of the right Fund Administrator becomes more important. Engage with a Fund Administrator that focuses on People, Process and Technology. Reach out to Ultimus LeverPoint to discuss ways outsourcing makes sense for you. High quality service from our first-class technical professionals increases your capacity by removing the complexity of your day to day administrative burden. We are here to partner with you through providing boutique services with institutional strength.

Institutional Strength Boutique Service

The Ultimus Group, LLC is an Equal Opportunity Employer. All rights reserved.

DISCLOSURE: Information contained on this website is based on public data, historical agreements and dialogue with intermediaries. Such information represents our current understanding of the described platforms and the costs associated with them. In many cases, such costs may be negotiable. All pricing and fee information is subject to change without notice.

Ultimus Fund Solution

8778 UFS 2/18/2022

Ultimus Fund Solution