What is a Fund Administrator?

If you’re interested in a career in Fund Administration but not sure what that entails, check out the following information for all you need to know.

What is a Fund?

A fund is a collective investment scheme - effectively a “pot” of money collected from many different investors for investing in securities such as stocks, bonds, money market instruments and other assets, with a view to the value of the fund hopefully going up and making money for the investors.  There is usually a minimum amount of investment e.g. £1,000.

Many funds managed in Guernsey are open-ended investment funds, where the investor can redeem his investment during the life of the fund and the investment is by way of equity (rather than debt).  Closed-ended investment funds (where the investor cannot redeem out), and funds where investments are structured by way of debt, are not normally subject to the usual regulatory requirements for investment funds, so are not treated as funds in the stricter sense of that word.

Each Fund is “Valued” at a particular time of day on a weekly, monthly, quarterly or annual basis, referred to as “NAV” or net asset value.  This is when the Fund Administrator checks the price of the shares in that Fund on internet sites such as Bloomberg or Reuters and then reports to each client how much their shares in each Fund are now worth.  At this point, the client may wish to buy more shares, sell their shares or retain the same amount.  So, Fund Administration can involve a lot of numerical calculations and that is why fund companies sometimes employ accountants or highly numerical candidates to undertake Fund Administration work.

In addition to the Fund itself, most offshore funds are required by local regulations to have various officers, most of whom are required to be licensed under relevant legislation, including: Administrator, Manager, Custodian and Prime Broker.

Offshore investment

Most offshore funds are formed as either an offshore company, a partnership (typically limited) or, less commonly, a unit trust.  The reason they are registered in Guernsey is to save tax, as Guernsey is one of several offshore tax centres with preferential tax rates.  Investments are by way of equitable interest (i.e. shares, partnership interests or units).  The shares or units in those funds are then offered to investors to purchase.


The Role of the Fund Administrator


So, what does a job as a Fund Administrator involve?

Funds are looked after or managed by Fund Administrators who generally have some client contact and who may well manage a portfolio of several different Funds at once.

Fund administration can often be split into 2 areas:

  • Valuations/“NAV” – see above
  • Share Registrations/Transfer Agency – arranging share transfers, processing payments for the purchase and sale of shares, maintaining shareholder records, etc.


Types of Fund

There are many different types of Fund including:

  • Private Equity
  • Property / Real Estate
  • Infrastructure
  • Hedge
  • Fund of Funds
  • Umbrella Fund
  • Bond Fund
  • Equity Fund
  • Money Market Fund
  • Fixed Income Fund
  • Index Fund
  • Balanced Fund


Hedge Funds

Hedge Funds are popular in Guernsey.  It’s a fund which is managed 'aggressively' to get maximum rates of returns by using derivatives and swaps, selling short, and using arbitrage techniques. Because of the high risk, investors in hedge funds have traditionally been drawn from the ranks of institutional investors who have well-diversified portfolios and can afford to take on the extra risk. The rewards of hedge fund managers are usually heavily geared towards the performance of their funds.


What are the relevant fund administrator qualifications?

Fund Administrators generally study for a relevant professional qualification to progress their careers, which may be an accounting qualification e.g. ACCA/ACCA, or the ICSA qualification which covers general finance sector administration (funds, investments, trusts, companies, corporate governance, etc.).  A Guernsey-based training organisation also offers an Advanced Certificate in Fund Administration.


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