In The News
-Sathish Raman
Ola Popoola, FCCA, has spent more than two decades working across financial services, fund accounting, private equity, financial reporting and business transformation. Throughout that career, he has seen how quickly operational complexity can grow around a fund, often before a manager realizes that the systems supporting it have become difficult to control. For Ola, that is why fund administration should not be treated as something to address only after a fund reaches scale. Emerging managers naturally focus first on investment strategy, fundraising, relationships and portfolio opportunities, while administration can seem secondary. But the operational responsibilities begin almost immediately.
Investor records have to be maintained, capital calls and distributions documented, fees and allocations calculated, accounts reconciled and financial information produced when investors, auditors or other stakeholders request it. A small fund may initially manage much of this internally, but the problem comes when temporary processes become permanent. A spreadsheet created for five investors may eventually be used for 20. Manual reconciliations may continue even as transaction volumes increase. Information can become scattered across files, emails and systems, making it harder to establish one reliable financial record. Ola believes this is where emerging managers can create unnecessary problems for themselves.
Ola Popoola, a finance expert, argues emerging fund managers must outsource fund administration from day one. He highlights how early outsourcing prevents operational complexities, ensures discipline, and attracts sophisticated investors. This proactive approach builds a robust foundation, crucial for long-term success and credibility in managing institutional capital.
In Ola’s view, bringing in an independent fund administrator from the beginning can create structure before complexity begins to accumulate. Instead of redesigning operational processes several years into the life of a fund, managers can start with established procedures for recordkeeping, reconciliations, reporting and investor administration. The value is not simply convenience. Operational discipline can also affect the way sophisticated investors view a manager. Transparent administration, dependable investor reporting, accurate net asset value calculations and effective compliance processes can help demonstrate that the organization has the infrastructure required to manage outside capital responsibly.
That becomes increasingly important as emerging managers begin speaking with larger or more institutional investors. A compelling investment thesis may attract attention, but investors also want confidence in the organization behind it. They want to know that financial records are supported, reporting is consistent and operational responsibilities are not dependent on one person inside a small team. Ola’s career has repeatedly placed him close to those processes. His experience includes fund accounting, private equity administration, financial reporting, reconciliation and data migration, along with assignments involving institutions such as Goldman Sachs, UBS, HSBC, Barclays and Lloyds Banking Group.
That background has shaped his view that fund administration is not simply a back-office function. It is part of the infrastructure that allows a fund to operate credibly. Outsourcing can also introduce a useful degree of separation. In a small organization, the same people may be involved in investment decisions, investor communication and financial administration. That can be manageable at the beginning, but it becomes more difficult as the fund grows. An external administrator creates a more defined process around the financial records. The manager remains accountable for understanding the information and overseeing the fund, while the underlying administration is supported by a specialist focused on accuracy, consistency and timely reporting.
For Ola, this matters because financial data rarely becomes easier to manage once problems have accumulated. Much of his career has involved data migration and reconciliation. He has worked on moving fund information between systems, validating records, testing new platforms and reconciling balances after migration. Those projects have shown him how difficult it can be to correct inconsistencies after years of data have already been created. The same principle applies to fund administration. Weak recordkeeping, inconsistent processes or unclear ownership of financial information can become much harder to fix as the organization expands.
There is also the question of management time. Emerging fund managers rarely have large teams, and every hour spent reconciling investor records, checking administrative calculations or reconstructing historical information is time that cannot be spent on the areas where the manager is expected to create value. Outsourcing does not eliminate oversight. It changes where that effort is concentrated. Instead of building an administration function internally from scratch, managers can oversee a professional provider while focusing more of their internal resources on strategy, portfolio management and investor relationships.
Technology can improve the process, but Ola does not see technology alone as the answer. Modern fund-administration platforms can automate reporting, maintain investor information and process large volumes of financial data efficiently. But technology still depends on accurate information, consistent processes and people who understand what the numbers represent. A sophisticated platform cannot compensate for poor operational discipline.
For emerging managers, the decision to outsource fund administration should therefore not depend only on the current size of the fund. The more important question is whether the operating model being created today can support the organization the manager hopes to build tomorrow. Waiting until reporting becomes difficult, investors begin asking more detailed questions or historical records need to be reconstructed can make the transition much more complicated.
For Ola Popoola, outsourcing fund administration from day one is ultimately about building the right foundation before it is tested. Strong administration may not be the most visible part of launching a fund, but as the organization grows, it can become one of the clearest signs that the manager is prepared for the responsibilities that come with managing institutional capital.
