Hedge Fund Administration - Why It Is A Necessity Part 2

So, what exactly do hedge fund third party administrators do? Well, hedge fund administrators act as a third party accountant and record transactions between fund managers and their investors. They track subscriptions to and redemptions from the hedge fund, which provides third party verification of when new capital is available to be invested by the fund managers or when capital is withdrawn from the fund and can be accessed by the investor. Furthermore, hedge fund administrators calculate performance of the fund as a whole and the individual investment positions and provide the performance information to investors.

As specialist in financial regulations, hedge fund administrators provide Anti-Money Laundering and Know Your Customer compliance programs required by the IRS and Office of the Treasury, which assure investors aren't robbed by fund managers and provide hedge funds with the required background information on their investors. Also, investor records and registration are often created and maintained by the third party administrator.

Additionally, because hedge fund administrators are experts in accounting, they will handle tax preparation for the general and limited partners, work with independent auditors, and make certain all statements they provide are GAAP compliant.

FULL DISCLOSURE - HedgeCo Networks owns G & S Fund Services, a full service hedge fund administrator and administration firm. Evan Rapoport is a part owner and co-founder of HedgeCo Networks.

TAGS: Hedge Fund Administration, Hedge Fund Administrators, Hedge Fund Accounting, Hedge Fund Performance, Hedge Fund Fraud, Hedge Fund Investors


  1. How does someone break into the third party hedge fund administration space. I have about 6-8 people with extensive knowledge of hedge fund accounting and tax experience. Trained at big four and other regional hedge fund specialty firms. We have extensive knowledge in both the accounting and tax space. Multiple CPAs. Currently striking NAVs, allocations and K-1 preparation for multi-billion assets under management in the Philadelphia area (10+ years). If anyone has any advice or wants to Joint Venture a startup please contact me. fundservice1@yahoo.com

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