Private Fund Glossary

What is fund administration?

Fund administration is the outsourced back office of a private fund. The administrator keeps the books, reconciles to the custodian and prime broker, values the portfolio under ASC 820, strikes net asset value, maintains each investor's capital account, and hands the auditor and tax preparer a package they can work from. The manager keeps investing; the administrator keeps the record independent.

The five core functions

Fund accounting & NAV

General ledger and trial balance, cash, position, margin and FX reconciliations, trade-date investment accounting, and a three-way NAV tie-out each close.

Valuation under ASC 820

A written valuation policy, independent price verification, and documented treatment of Level 2 and Level 3 positions that an auditor can follow.

Investor capital accounting

Capital accounts by investor and series, management fee and carried interest allocations, high-water marks, capital calls, distributions, transfers, and investor statements.

Reporting, audit & tax support

GAAP financial statements, audit PBC packages, and tax workpapers handed to the fund's auditor and tax preparer — the administrator does not sign the audit.

Investor onboarding & compliance ops

Subscription document workflow, accredited-investor and qualified-purchaser verification, AML/KYC review, Form D and Blue Sky notice filings, and the filing calendar.

Common questions

What is fund administration?

Fund administration is the outsourced back office of a private fund. The administrator keeps the fund's books, reconciles cash and positions against the custodian and prime broker, values the portfolio under ASC 820, calculates net asset value, maintains each investor's capital account, processes capital calls and distributions, produces investor statements and GAAP financial statements, and supports the annual audit and tax filings.

What does a fund administrator do that the manager cannot?

Independence and segregation of duties. When the same person who trades also strikes NAV, auditors and institutional LPs treat the number as unverified. A third-party administrator provides an independent NAV, a reviewer behind the preparer, and a documented control trail — which is increasingly a condition of allocating capital.

Is a fund administrator required by law?

No U.S. rule requires a private fund to appoint an administrator. In practice most institutional investors, auditors, and prime brokers expect one, and the SEC's custody and books-and-records expectations are much easier to meet with independent administration in place. Registered funds under the 1940 Act are a different regime with their own requirements.

What is a three-way NAV tie-out?

A reconciliation that agrees the accounting records, the custodian or prime broker statements, and the investor capital accounts to the same net asset value for the period. If those three do not tie, NAV is not released. It is the single most useful control question to ask a prospective administrator.

What is the difference between a fund administrator and an auditor?

The administrator prepares the books, NAV, and financial statements. The independent auditor examines them and issues an opinion. The same firm cannot do both for the same fund — independence rules prohibit it. FIN Group serves as administrator and coordinates with your chosen audit and tax firms.

Can fund administration and compliance come from one provider?

Yes, and for emerging managers it is usually more efficient. FIN Group delivers fund administration alongside fractional CCO and compliance services, with RegReview (Compliance OS) and InvestPrep (Private Capital OS) included in the engagement fee so the filing calendar, LP onboarding, and fund books sit in one system.

Need an administrator for your fund?

FIN Books delivers launch setup, fund accounting and NAV, and ongoing fund operations for emerging managers — with RegReview and InvestPrep access included in the engagement fee.