How to Select a Fund Administrator — RFP Questions to Ask

A fund administrator's work is largely invisible when it's done well and highly visible when it isn't — usually at the worst possible moment, like a delayed NAV during a redemption window or an error surfacing during an investor's own audit. Here are the questions that actually separate strong administrators from weak ones.

Why the RFP Process Deserves More Rigour Than It Usually Gets

Fund administrators handle NAV computation, investor capital call and distribution processing, capital account statements, and increasingly a fund's regulatory reporting support — functions that touch every investor's experience of the fund directly. A poorly chosen administrator doesn't just create internal inefficiency; it shows up as errors and delays in the documents investors actually see, damaging the Manager's credibility in a way that's hard to repair.

Questions on Core NAV Computation Capability

Ask specifically: what is the administrator's standard NAV computation timeline after month/quarter end, and what has their actual track record been (not their SLA target) on meeting it for existing clients of comparable complexity? For funds holding illiquid or unlisted instruments, ask how the administrator handles valuation input from the Manager — do they merely mechanically apply Manager-supplied valuations, or do they run any independent reasonableness checks, and what's their process when a valuation input looks anomalous?

Questions on Capital Call and Distribution Processing

Ask how the administrator handles the mechanics of capital call notices and distribution processing — turnaround time from Manager instruction to investor notice, how they handle partial payment or investor default scenarios, and whether their systems can handle the fund's specific waterfall structure (particularly relevant for funds with tiered carried-interest structures or GP-commitment subordination, as covered in our companion piece on GP versus LP commitment) without requiring manual off-system calculation.

Questions on Regulatory Reporting Support

Given SEBI's increasingly detailed AIF reporting requirements, ask directly whether the administrator's systems are built to support the specific regulatory filings the fund will need — and whether they proactively track regulatory changes affecting reporting formats, or expect the Manager's own compliance team to identify format changes and instruct them accordingly. This distinction matters considerably for a Manager's own compliance workload.

Questions on Technology and Investor Portal

Ask what investor-facing reporting technology the administrator offers — a modern investor portal with self-service access to capital account statements and historical reporting is now a genuine competitive differentiator for a Manager's own investor relations, not just an administrator convenience. Ask specifically about data security certifications and access controls, particularly given the sensitivity of investor financial data discussed in our companion piece on DPDPA compliance.

Questions on Team Structure and Continuity

Ask who specifically will service the account day-to-day — not just the sales team presenting the RFP response, but the actual operations team, their tenure with the firm, and what happens to service continuity if that specific team member leaves. Administrator relationships that work well often come down to a strong working relationship with a specific team, and understanding the depth of bench behind that team matters for long-term continuity.

Questions on Fee Structure and Scalability

Ask for a clear fee schedule covering the base administration fee, any transaction-based charges, and — importantly — how fees scale as the fund grows in AUM or investor count, since some fee structures that look competitive at launch become disproportionately expensive once a fund scales, or conversely fail to account for the genuinely higher servicing cost of a large, complex investor base.

Reference Checks With Existing Clients of Comparable Complexity

As with custodian selection, direct conversations with existing clients running a comparable strategy and scale — asking specifically about NAV timeliness, error-correction responsiveness, and how the administrator has handled a genuine operational problem when one has arisen — tell a Manager more than any RFP response document can.

Running a Proper Evaluation From the Start

A fund administrator relationship, like a custodian relationship, is meant to run for the fund's entire life — worth a properly structured RFP process rather than a quick decision based on a peer recommendation or the lowest quoted fee. We help fund managers build and run this evaluation as part of fund formation.

This article is for general informational purposes and does not constitute a recommendation of any specific fund administrator.

CA Anuj Desai