Examining operations is essential to achieving optimal performance. When systems are already in place, the focus shifts to simplifying processes and improving efficiency. By honing in on a few key areas, fund managers can create smoother, more sustainable operations.
Here are six smart ways to enhance fund operations:
1. Set Clear KPIs
Establishing measurable goals, or KPIs, across key areas like reporting, data quality, valuations, and compliance helps fund managers keep a finger on the pulse of operations. Clear KPIs provide a snapshot of what’s working and where adjustments may be needed, helping to ensure that the fund consistently meets industry standards and investor expectations.
2. Improving Accounting Efficiency
Based on cross-industry benchmarking data (October 2024) from the American Productivity and Quality Center® (APQC), median organisations automate 30% of their general accounting journal line items. In contrast, top-performing organisations, those in the 75th percentile, automate an average of 58% of their monthly journal line items.
Can your organisation improve its accounting efficiency? Here are KPIs that will give any fund manager valuable insights into the status, and repeated measurements will enable CFOs to track improvements over time.
KPIs that can be universally measured and tracked for any fund manager are, % of:
- Reporting Deadlines Met
- Journal Entries Automated
- Errors in Journal Entries
- IC Position Mismatches
And number of days:
- Time to Close Books
3. Balance In-House and Outsourced Resources
Finding the right mix of in-house and outsourced work can drive efficiency. Specialised tasks—such as valuation and reporting—can often be handled more effectively by an external partner, allowing internal teams to focus on core activities. It’s important, though, to view these partners as part of the team rather than as outsiders. By integrating them closely, firms maintain flexibility without compromising quality.
4. Choose the Right Technology
In today’s environment, using the right technology is essential for streamlining fund management. Automating data processes and providing transparent reporting for investors are just a couple of areas where tech can make a difference. Fund managers have two options: either invest in technology themselves or partner with a fund administrator that already has robust tech systems in place. The goal is to save time on repetitive tasks and free up teams for strategic decision-making.
5. Build a Collaborative Culture
A culture that encourages teamwork—especially between deal teams and finance and other functions—can help drive efficiency and create a strong foundation for success. By fostering a collaborative approach, everyone involved, from internal teams to external partners, remains aligned with the fund’s values and goals. This creates a cohesive environment that supports smart, informed decision-making.
6. Partner with the Right People
Choosing the right partners is essential to building efficient operations. When evaluating potential fund administrators or service providers, it’s important to look for alignment in values and objectives. As the fund’s needs evolve, reassessing these partnerships ensures they continue to support both immediate and long-term goals.
Keeping an Eye on Improvement
While it’s essential to master the basics, it’s just as important to stay open to improvement. By encouraging cross-functional teamwork and leveraging new tools, fund managers can identify areas for growth. A team approach, where fund managers and administrators work together, promotes a more flexible, resilient operation.
By focusing on these six areas—clear goals, Improving Accounting Efficiency, balanced resources, smart technology, collaborative culture, and the right partnerships—fund managers can create an operation that’s efficient, scalable, and ready for the future.
At Taru, we offer fund administration services built on forward-focused technology and exceptional client service. We are a team of fund administration specialists passionate about redefining fund administration, backed by a reputable independent and global firm.
