Choosing Fund Service Providers

Fund administrators handle NAV (Net Asset Value) calculation, investor onboarding and KYC/AML, subscription and redemption processing, capital call management, investor reporting, regulatory filings, and transfer agency services. They provide an independent check on the fund manager's reported performance.

Consider: jurisdiction expertise (are they licensed in your fund's domicile?), technology platform (do they offer a portal for LPs?), asset class coverage (can they handle your strategy - hedge fund vs PE vs real estate?), scalability, service model (dedicated team vs shared pool), and fee structure. Key global administrators include SS&C, Citco, Apex Group, and Trident Trust.

Yes. Fund administrators frequently recommend complementary technology platforms to their clients - deal analysis tools, CRM systems, document management, and investor portals. This makes fund administrators a natural referral partner for technology providers like DiligenceWorks.

Yes. Both DFSA (DIFC) and MAS (Singapore) require annual audited financial statements. The auditor must be from the regulator's recognised list. They review valuation methodology, confirm capital-adequacy ratios, and sign the financial statements.

Big 4 (Deloitte, PwC, EY, KPMG) serve the largest funds. Mid-tier firms (BDO, Grant Thornton, Baker Tilly, Mazars) serve emerging and mid-size managers at lower cost. Specialist fund auditors may offer better service for smaller operations.

A prime broker provides trade execution, use, securities lending, and capital introduction. A custodian provides safekeeping of assets, position reporting, and settlement. Some prime brokers also offer custody, but large funds often separate these relationships for governance. In DIFC, the DFSA requires an independent custodian unless the prime broker meets specific eligible-custodian criteria.

Not all funds need prime brokerage. Hedge funds that use use, short selling, or trade frequently need prime brokers. Long-only PE and VC funds typically do not. All funds need a bank account (which serves as cash custodian) and an investment custodian if holding securities.

DFSA and MAS both require a Compliance Officer as part of the licensed entity. For emerging managers, outsourcing compliance to a specialist firm (e.g., ACA Group, Waystone, Vigilant) is common and often more cost-effective than hiring a full-time CCO. The compliance consultant helps establish AML/KYC programmes, regulatory filings, and ongoing monitoring.

Professional Indemnity (PI) insurance is mandatory for DFSA and MAS-regulated entities. Directors & Officers (D&O) insurance protects the fund's board members. Errors & Omissions (E&O) insurance covers professional mistakes. Cyber insurance is increasingly expected by LPs. DIFC, ADGM, and DMCC all mandate PI cover for professional service firms.

The AIMA Illustrative Questionnaire for Due Diligence of Investment Managers is the industry-standard template used by LPs to evaluate fund managers. First published in 1997, the 2025 edition covers hedge funds, private equity, private credit, and CTAs with expanded modules on governance, operations, risk management, and - for the first time - integrated technology questions.

The AIMA DDQ can exceed 200 questions covering investment process, risk management, operations, compliance, business continuity, and technology. Professional DDQ preparation services cost USD 25,000-75,000 but significantly accelerate institutional fundraising.

The 2025 AIMA DDQ integrates technology questions directly into the main questionnaire (previously a separate DDQ). LPs ask about: data storage and sovereignty, cybersecurity posture, disaster recovery, system architecture, third-party technology providers, and how technology supports the investment process. DiligenceWorks helps managers answer these questions with a documented, auditable, self-hosted technology stack.