Fund administrators are much more than providers of vital back-office processing — they are essential partners that develop and secure support structures around a fund so that managers can focus on the core aspects of the investment business. Selecting a partner who can support and enhance your back-office operations and adjust to the unique and evolving needs at various lifecycle stages of your fund is vital for its success. Whether you are starting a fund, or considering switching from your current fund administrator, finding the one that is best aligned with your needs can be challenging. 

Bigger is Not Always Better When Choosing Your Fund Administrator

In the circumstances like these, fund managers face a difficult small vs. large fund administrator choice. In the hope of securing that their needs are met, they will often resort to larger administrators assuming bigger players bring safety, security, and superior customer service — only to find themselves disappointed when faced with a much different reality. 

When it comes to fund administration, there are hidden challenges that often arise when engaging with larger service providers. The reality is that — at least in this business — bigger is often not better. 

Here are the four most common issues within large fund administrators that you need to be aware of when selecting your fund administration.

1. “A-List” Service Team Is Saved for the Biggest Fish in the Pond

Fund managers seek reputation and reliability: a competent and devoted partner they can trust. They want to work with tried and tested experts who can do their job.

Running a large administration firm means having large resources at disposal, including human resources. While this factor does present one of their key strengths, in practical terms, this often means that not all personnel will have the same level of competencies and experience. 
There will often be an “A-List” service team, a pool of great talent that is in high demand, and then there will be all others. The former will usually be deployed on bigger, more prominent names and more lucrative accounts, while the latter will be assigned to clients that may look like small fish in a big pond. The reality is that a large administrator will be more focused on higher-paying fee clients while others will usually not get the same level of attention.

If you are not a large fund manager, a large administrator will probably not be a perfect fit. Despite all the bells and whistles that you expect to come with larger service providers, you may end up with a subpar service — below what you could get with smaller service providers. In our experience, it is not uncommon for fund managers to switch fund administrators if they feel they are not getting adequate attention and service. 

In contrast, smaller service providers usually have a more integrated, holistic view of their talent pool, which means a more consistent service across their client base.

2. Generalized Service Offering

Specialized services are becoming a powerful differentiator among fund administrators. Here again, bigger doesn’t necessarily mean better or more specialized. Smaller firms often provide specialized competencies or deep expertise in certain areas, bringing immense benefit for their clients. 

Still, that doesn’t mean that clients can’t get a full-range service with them. Smaller administrators can broaden their suite of services by partnering with third-party providers, often providing the full suite of services beyond what larger organizations can. This way, they can respond to clients’ needs across the whole services spectrum without losing that essential personal touch.

3. Scale Hinders Bespoke Relationship 

Size may have advantages, but with bigger size usually comes a more commoditized client service. This means that larger administrators are usually not able or willing to provide the necessary bespoke services for your fund.

Essential aspects of the business are being lost in the search for scale. The loss of personal touch and a more collaborative partnership approach is often something that even competitive pricing that larger administrators may offer cannot compensate for. 

If you are a smaller or an emerging manager or a startup fund, your needs will be much different than the needs of a more established manager –but will a large administrator be able to respond or willing to accommodate these unique needs? 

While larger, more established managers tend to go straight to the large service providers to get a one-stop-shop with the full suite of services, emerging managers will benefit from a more personal touch. For them, engaging a fund administrator goes beyond simply outsourcing back-office operations. A smaller fund administrator with whom they are likely to form a strategic partnership will usually be a better fit. 

4. Large Administrators: More Change, But Less Agility 

Large administrators, often scale-focused, go through frequent mergers and acquisitions in their quest for ever-increasing size. But these events consume too many resources, distracting employees from doing their core business and servicing clients. As a result, customer experience suffers, leading to increased clients’ dissatisfaction. Often, large administrators lose key personnel following these events, which all adds to the lower client satisfaction given that fund administration is a relationship business, after all.

Also, a large administration business requires commoditization and mass-service offering. As a result, client relationships may suffer since decision-making is often removed from the trenches and centralized at the top. In contrast, smaller providers can be more agile, flexible, and inventive. They can move quickly, easily scale up or down, and come up with competitive service offerings.

Search for the Perfect Fit, Not Size

The ideal fund administrator is the one that integrates the right people, processes, and technology into a reliable and competent structure to ease the administrative burden from fund managers and help them grow.

Inherent to the business model of larger administrators are challenges that may jeopardize service levels they provide to their clients — especially those clients that are not big enough to attract their undivided attention. 

This allows smaller independent firms to stand out and close the market gap. Often with niche competencies and mid-market focus, they can provide top-notch, bespoke services to all clients, big or small.
Reliant Fund Services provides full administration and accounting solutions to middle-market private equity and venture capital funds. With a management team that leverages more than 50 combined years of experience, we are committed to offering a premier experience to each client. Our clients are at the center of all we do. With a dedicated team of highly skilled professionals assigned to each client, we firmly believe that all clients should receive the highest service level.

Fund administrators are much more than providers of vital back-office processing — they are essential partners that develop and secure support structures around a fund so that managers can focus on the core aspects of the investment business. Selecting a partner who can support and enhance your back-office operations and adjust to the unique and evolving needs at various lifecycle stages of your fund is vital for its success. Whether you are starting a fund, or considering switching from your current fund administrator, finding the one that is best aligned with your needs can be challenging. 

Bigger is Not Always Better When Choosing Your Fund Administrator

In the circumstances like these, fund managers face a difficult small vs. large fund administrator choice. In the hope of securing that their needs are met, they will often resort to larger administrators assuming bigger players bring safety, security, and superior customer service — only to find themselves disappointed when faced with a much different reality. 

When it comes to fund administration, there are hidden challenges that often arise when engaging with larger service providers. The reality is that — at least in this business — bigger is often not better. 

Here are the four most common issues within large fund administrators that you need to be aware of when selecting your fund administration.

1. “A-List” Service Team Is Saved for the Biggest Fish in the Pond

Fund managers seek reputation and reliability: a competent and devoted partner they can trust. They want to work with tried and tested experts who can do their job.

Running a large administration firm means having large resources at disposal, including human resources. While this factor does present one of their key strengths, in practical terms, this often means that not all personnel will have the same level of competencies and experience. 
There will often be an “A-List” service team, a pool of great talent that is in high demand, and then there will be all others. The former will usually be deployed on bigger, more prominent names and more lucrative accounts, while the latter will be assigned to clients that may look like small fish in a big pond. The reality is that a large administrator will be more focused on higher-paying fee clients while others will usually not get the same level of attention.

If you are not a large fund manager, a large administrator will probably not be a perfect fit. Despite all the bells and whistles that you expect to come with larger service providers, you may end up with a subpar service — below what you could get with smaller service providers. In our experience, it is not uncommon for fund managers to switch fund administrators if they feel they are not getting adequate attention and service. 

In contrast, smaller service providers usually have a more integrated, holistic view of their talent pool, which means a more consistent service across their client base.

2. Generalized Service Offering

Specialized services are becoming a powerful differentiator among fund administrators. Here again, bigger doesn’t necessarily mean better or more specialized. Smaller firms often provide specialized competencies or deep expertise in certain areas, bringing immense benefit for their clients. 

Still, that doesn’t mean that clients can’t get a full-range service with them. Smaller administrators can broaden their suite of services by partnering with third-party providers, often providing the full suite of services beyond what larger organizations can. This way, they can respond to clients’ needs across the whole services spectrum without losing that essential personal touch.

3. Scale Hinders Bespoke Relationship 

Size may have advantages, but with bigger size usually comes a more commoditized client service. This means that larger administrators are usually not able or willing to provide the necessary bespoke services for your fund.

Essential aspects of the business are being lost in the search for scale. The loss of personal touch and a more collaborative partnership approach is often something that even competitive pricing that larger administrators may offer cannot compensate for. 

If you are a smaller or an emerging manager or a startup fund, your needs will be much different than the needs of a more established manager –but will a large administrator be able to respond or willing to accommodate these unique needs? 

While larger, more established managers tend to go straight to the large service providers to get a one-stop-shop with the full suite of services, emerging managers will benefit from a more personal touch. For them, engaging a fund administrator goes beyond simply outsourcing back-office operations. A smaller fund administrator with whom they are likely to form a strategic partnership will usually be a better fit. 

4. Large Administrators: More Change, But Less Agility 

Large administrators, often scale-focused, go through frequent mergers and acquisitions in their quest for ever-increasing size. But these events consume too many resources, distracting employees from doing their core business and servicing clients. As a result, customer experience suffers, leading to increased clients’ dissatisfaction. Often, large administrators lose key personnel following these events, which all adds to the lower client satisfaction given that fund administration is a relationship business, after all.

Also, a large administration business requires commoditization and mass-service offering. As a result, client relationships may suffer since decision-making is often removed from the trenches and centralized at the top. In contrast, smaller providers can be more agile, flexible, and inventive. They can move quickly, easily scale up or down, and come up with competitive service offerings.

Search for the Perfect Fit, Not Size

The ideal fund administrator is the one that integrates the right people, processes, and technology into a reliable and competent structure to ease the administrative burden from fund managers and help them grow.

Inherent to the business model of larger administrators are challenges that may jeopardize service levels they provide to their clients — especially those clients that are not big enough to attract their undivided attention. 

This allows smaller independent firms to stand out and close the market gap. Often with niche competencies and mid-market focus, they can provide top-notch, bespoke services to all clients, big or small.
Reliant Fund Services provides full administration and accounting solutions to middle-market private equity and venture capital funds. With a management team that leverages more than 50 combined years of experience, we are committed to offering a premier experience to each client. Our clients are at the center of all we do. With a dedicated team of highly skilled professionals assigned to each client, we firmly believe that all clients should receive the highest service level.

Home

Services

Meet the Team

Insights

Technology

Careers

Contact Us

Latest Insights

Top Qualities of High
Functioning Fund Admin Firms

Fund Administration: Outsourced
or In-house?

Hidden Challenges of Fund
Managers working with Larger Administrators

Contact Us

Send us an Email

Latest Insights

Top Qualities of High
Functioning Fund Admin Firms

Fund Administration: Outsourced
or In-house?

Hidden Challenges of Fund
Managers working with Larger Administrators

Home

Services

Meet the Team

Insights

Technology

Careers

Contact Us

Contact Us

Send us an Email