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Fund Administration: A Complete Guide

Sam Bratchie

Director, IFINA

An Investment Fund – The Next Step For Talented Traders

Are you a talented trader? If you are, you might want to trade other people’s money for a living.

Now, there are a few ways to do this. But the best traders usually create their own professional investment fund.

An investment fund is simply a pool of other people’s money. Using this pool of capital, an investment fund manager has the opportunity to make significant returns trading the financial markets.

What Is Fund Administration?

Unsurprisingly, investment funds need to comply with numerous financial regulations. Plus, investment funds have many administrative tasks.

This process is known as fund administration.

Fund administration is typically managed by a fund administrator (like IFINA). An administrator takes care of compliance and administrative tasks, which allows the investment fund manager to focus on trading.

Specifically, a fund administrator helps with the formation of professional investment fund structures, the provision of independent valuation and share registry services.

In other words, if you want to create an investment fund – you need a specialist in fund administration.

Fund Administrations Services

So fund administration deal with regulation and admin. While this description is simple, it doesn’t give you a complete picture of administrator responsibilities.

Below is a full description of IFINA’s fund administration services.

Core Services

  • Regulatory ‘Hosting’ Services: Should you require ‘regulated status’ to manage investments we can refer you to ‘regulatory hosting’ service providers.
  • Fund Accounting: We can prepare comprehensive accounting records for your investment fund.
  • Registrar & Transfer Agency: We can act as your investment fund’s registrar and transfer agency.
  • Banking & Treasury: We can assist your investment fund in setting up effective cash management processes.
  • Bespoke Administration Services: We can take care of your investment fund’s ongoing administration tasks.

Financial & Treasury Services

  • Maintenance of fund and client bank accounts.
  • Preparation of fund wire transfer instructions.
  • Acting dual signatory on fund bank accounts.
  • Preparation of management company invoicing.
  • Accounting services to fund management companies.
  • Bank account reconciliations.
  • Cash flow monitoring and reconciliations.
  • Preparation of group operational financial statements.

Corporate Administration Services

  • Fund formation.
  • Regulatory licensing.
  • Legal documentation and compliance.
  • Bank and broker accounts establishment.
  • Stock exchange listing.
  • Collation and review of client and investor due diligence and AML.
  • Preparation and filing of reports to regulators.
  • Co-ordination of fund annual audits.
  • Company incorporation.
  • Company secretarial services.
  • Processing fund subscriptions/redemptions/transfer.
  • Maintenance of fund share registers.
  • Preparation of investor share confirmations.
  • Preparation of NAV confirmation reports to investors.
  • Arranging periodic fund Board meetings and drafting resolutions.

Fund Administration & Valuation Services

  • Daily indicative calculation of net asset valuation.
  • Weekly/monthly formal calculation of net asset valuation.
  • Independent daily reconciliation of fund trading activity.
  • Independent pricing verification of fund security positions.
  • Liaising with fund brokers.
  • Bank and broker reconciliations.
  • Preparation of hard-copy account files and financial statements for audit purposes.
  • Daily communication with investment managers.
  • Preparation of draft financial statements for audit review.

Fund Administration Questions

Clearly, starting your own investment fund can be a daunting task. Before you do so, these are the fund administration questions you need to consider:

  • In which jurisdiction should I establish my investment fund?
  • What are the regulatory requirements?
  • Which law firm should I use to establish the fund?
  • Who acts a director to the fund?
  • Which audit firm do I appoint?
  • What bank do I choose for my investment fund?
  • Which fund administrator do I choose?
  • Do I need to be regulated?
  • What are the associated costs?
  • How long does it take?

Fund Administration: Jurisdiction

Your choice of fund jurisdiction really comes down to two categories: offshore or onshore. Here at IFINA, we have established two fund platforms to provide clients with both options.

Plus, these fund platforms are designed for traders that want create their first investment fund and obtain an audited track record.

Here’s a brief description of each platform.

Offshore IFINA

Offshore IFINA offers clients a low cost and all-inclusive offshore fund solution. We offer this product through our Cayman Islands Fund Platform.

In terms of offshore jurisdiction, the Cayman Islands is the leading domicile for offshore investment funds, attracting 80% of all new offshore fund formations.

The jurisdiction is estimated to house more than 75% of the world’s offshore hedge funds. It also counts for nearly half of the industry’s estimated US$1.1 trillion of assets under management.

Generally, the Cayman Islands is the preferred jurisdiction for professional registered investment funds.

Onshore IFINA

Onshore IFINA offers clients an all-inclusive onshore fund solution through our Malta Fund Platform.

Malta is a leading onshore EU jurisdiction – and our fund platform provides start-up fund managers with a solution that is convenient and low cost.

Fund Administration: What Are The Regulatory Requirements?

The offshore and onshore fund solutions offered by IFINA are regulated fund structures (regulated by the Cayman Islands Monetary Authority and the Malta Financial Services Authority respectively).

As such, they must operate in accordance with the mutual fund laws applicable to each jurisdiction. These are also ‘professional’ private placement fund structures, which means only professional investment fund managers can utilise them.

Fund Administration: What Law Firm Should I Use?

If you use IFINA to manage your fund administration, you don’t need to appoint a law firm. This could save you in the region of $20,000 USD.

Specifically, the costs associated with setting up a sub-fund in IFINA’s Cayman or Malta Fund Platforms include all legal costs associated with establishing the fund company and drafting of the fund information memorandum and agreements.

Fund Administration: Who Acts As Director To The Fund?

Directors (IFINA management) are already appointed to each of our offshore and onshore fund platforms. 

Fund Administration: Which Audit Firm Do I Appoint?

Audit firms are already appointed to each of the Fund Platforms. (Baker Tilly International for our Cayman Island Platform and PwC for our Malta Platform).

Fund Administration: What Bank Should I Choose For My Investment Fund?

IFINA has numerous banking relationships in place for its client-funds. We can provide a choice of banks most suitable to accommodate the fund strategy and domicile of the fund investor base.

Fund Administration: Do I Need To Be Regulated?

Clearly, your fund will need to comply with the financial services regulation of your chosen jurisdiction. Should you not be suitably regulated, IFINA can offer ‘regulatory umbrella’ hosting services.

Fund Administration: What Are The Associated Costs?

Both IFINA Fund Platforms will allow to create your own named fund for an all-inclusive price:

  • USD 9,750 for a sub-fund in the Cayman Fund Platform
  • EUR 25,000 for a sub-fund in the Malta Fund Platform

There are no hidden costs.

Everything is included: fund formation, drafting of fund offering memorandum and agreements, provision of ISIN and Bloomberg codes, establishment of bank, broker and custody accounts, appointment of audit firm, along with FATCA registration.

Fund Administration: How Long Does It Take?

Subject to IFINA receiving client due diligence in a timely manner, the time-frame to establish your own investment fund is typically five to six weeks.

CONTACT & QUESTIONS

GET IN TOUCH

If you have any questions about our services, please get in touch with us by filling out the contact form below. Our team will get back in touch within 48 hours.

Alternatively, you can browse through our listed Frequently Asked Questions on this page.

5 + 3 =

Where is Ifina based?

Ifina’s principal office is located in UK, where our specialist team handles fund formations, registrar and transfer agency services, along with treasury and banking functions for client funds.

Ifina also has offices in the British Virgin Islands and Singapore.

Is Ifina regulated?
Ifina is registered in the United Kingdom with the Financial Conduct Authority (FCA) for anti-money laundering purposes and is a regulated fund administrator in the British Virgin Islands. Ifina administers professional and private investment funds in Malta, Cayman, Gibraltar and the BVI.
How much does it cost to start an investment fund?

Ifina can provide an ‘all-inclusive’ fund solution for less than USD $10,000.

Cayman Fund Platform: USD $9,750:
Malta Fund Platform: EUR €25,000:

How do I get started?
Simply fill in the contact form on this page with your details. Our team will then contact you within 48 hours.