Red flag review

December 19 2017

YEAR END PLANNING

Red flag review

There are certain red flags that reveal friction between a GP and their fund administrator. As the year draws to a close, it might be time to check up on the status of that partnership. 

The work of the best fund administrators can be invisible, as the process for accounting, capital calls, distributions and reporting runs on without a hitch. But even without the obvious warning signs of a GP not having full 24/7/365 transparency into  all fund and LP activity, there are other warning signs from an administrator that can portend of problems to come. 

A major red flag is an inability to get that fund administrator to respond to questions or requests. “GPs should be able get a senior person on the phone on demand,” says Tania Mavronas, Managing Director at Gen II Fund Services.  “The client shouldn’t have to go through a fund accountant or wait days for a call back.” Mavronas notes that Gen II ensures their clients have access to senior team members all the time, and not have to go through junior staff or wait days for a response.

It’s not just phone calls. If a GP sends an email with a specific inquiry, the fund administrator should be prompt with a response or a note that they’re looking into it. “GPs should expect to know that the request is being addressed,” says Mavronas. 

Another red flag is a vacant calendar between the GP and administrator, with infrequent planning calls. There should be timelines with regular communication to discuss deliverables and any other issues, to allow a fund administrator to be able to plan. “Your fund administrator needs to be in frequent contact and proactively asking questions about the work ahead is critical,” says Mavronas. 

Turnover can also indicate a fund administrator may be stumbling with growth or service levels. Mavronas credits team stability as key to building institutional knowledge about a client and ensuring consistent levels of service. 

Finally, if the relationship with a fund administrator is a true partnership, there has to be a free exchange of information. The service provider should be willing to lead and make suggestions to the client, always lending their expertise to offer the best solution. “My clients like that I make recommendations to them,” says Mavronas.  “They appreciate the dialogue, and are grateful that I’m willing to have proactive and insightful conversations in order to better serve them. It really builds trust.”

In the end, each one of these features relates back to how much a GP trusts its service provider: Are there prompt responses to information requests, is there efficient planning of the required work, is the service team staying in place, and is there a regular dialogue about important issues that help both GP and administrator do their jobs better? Perhaps the only question GPs should ask themselves is how much they trust their administrator to help them succeed.