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Gearing up for interval fund operations: Questions to ask yourself

Recently we posted on the topic of gearing up to handle interval fund operations, either as an investment manager or a third-party service provider. One of the key ideas we covered was the need to think hard about where you “put” interval funds, operationally—whether traditional fund operations or alternative investment operations.

To further help with that thought process, we’d like to offer several questions to ask yourself up front.

  • How does your current fund servicing technology accommodate the unique requirements of interval funds, such as non-daily processes and the need for 1099 tax statements? Are there significant gaps?
  • How many systems do you want to use or have support your operations and their reporting?
  • What would be the impact on your operations team if interval funds were handled with the same systems and processes used for alternative funds? Could this arrangement support the necessary scale, compliance, and tax reporting?
  • If you foresee handling interval funds in your alts operations but generating 1099s elsewhere, how will the software integrations work?
  • How many more interval, tender-offer and other nontraditional products are you likely to handle in the coming years? What does it mean for the future to go down one road versus another?
  • If you are a servicer:  If you place interval funds within traditional operations, how will you handle the scale and standardization required, and are you organized to effectively handle the non-daily transaction activity?
  • If you are an investment manager: Where is your product-development focus, and are your operation support systems prepared to support your vision?

We’ve had a lot of conversations on these and similar questions. I cordially invite you to be in touch to talk over your situation. If you’d like, I’ll certainly be happy to share details of our “one system” approach at Envision. (But even if that’s not where your head’s at right now, I’d love to talk things over.)

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