Process or Partnership? Understanding Today’s Fund Administration Models

For certain strategies and operating environments, a more standardized service approach may remain entirely appropriate. But as structures become more complex and LP expectations continue to rise, operational fit becomes increasingly important.

Understanding which model your administrator is actually delivering is an important step in assessing whether your current approach remains well-matched to your fund’s requirements.

Today’s Service Models

The fund administration market has evolved into two distinct service approaches.

Model 1: Process-Driven Administration

Structure:

• Teams led by professionals with 1-3 years of experience
• Rotating analyst assignments on 12-18 month cycles
• Offshore support centers managing routine requests
• “Dedicated teams” shared across 15+ client relationships

Service characteristics:

• Ticket-based request systems with defined SLAs
• Standardized processes with limited customization flexibility
• Senior oversight “available upon escalation”
• Platform-driven workflows with manual accommodations for complexity

Appropriate applications:

• Straightforward buyout strategies with standard waterfall structures, strategies such as long/short equity, direct real estate, or commodities funds
• Funds under $300M prioritizing cost efficiency
• GPs with substantial internal finance capacity able to self-direct

Where this model creates friction:

• Complex carry structures requiring bespoke calculation logic
• Multi-jurisdiction vehicles demanding integrated reconciliation
• GP-led secondaries, continuation funds, or hybrid structures
• Situations requiring genuine LP transparency and real-time reporting capability

Model 2: Partnership-Based Administration

Structure:

• Named, senior relationship owner (Director or VP-level)
• Consistent team maintaining institutional knowledge of your fund
• Direct access to technical specialists across tax, legal, and treasury functions
• Functions as extension of your finance operation

Service characteristics:

• Real-time portal access with live calculation, data, and modeling capabilities
• Proactive communication identifying issues before escalation
• Solutions tailored to your structure rather than template compliance
• Senior accountability for outcomes, not process adherence

Appropriate applications:

• $500M–$1.5B funds with institutional LP bases
• Complex strategies such as private credit, secondaries, and co-investment structures, event driven, leveraged buyouts or multi-strats
• GPs preparing for fundraising under heightened LP scrutiny
• Teams seeking operational leverage without expanding internal headcount

Where this model may not fit:

• Situations where absolute minimum pricing outweighs service quality
• Preference for arm’s-length vendor relationships over collaborative partnerships

The Evolution in LP Expectations

In 2020, process-driven administration represented the industry standard. By 2026, institutional limited partners ask fundamentally different questions:

“Can you provide same-day exposure reporting and more transparency?”
“Can we access co-investment opportunities through real-time portals?”
“Can you show us our portfolio liquidity profile and governance?”

Process-driven models struggle to address these requirements efficiently. Partnership-based administration delivers them as baseline service.

Questions Worth Asking About Your Service Model

Whether evaluating your current administrator or considering alternatives, these questions reveal substantive differences in service models.

Question 1: “Who will serve as my named, senior relationship owner, and what is their client portfolio?”

Process-driven response: “You’ll have a dedicated team led by a Senior Manager who oversees our mid-market practice.”

Translation: You’ll work with rotating staff; no individual owns your relationship. The “Senior Manager” manages 30+ client relationships and won’t know your fund’s operational details.

Partnership response: “Your Director is [Name], managing 8 client relationships totaling $4.2B AUM. Here’s their background and direct contact information. They’ve been with us for 6 years.”

What this information reveals: Named accountability versus diffused responsibility.

Question 2: “Can you demonstrate our waterfall calculation now, or do you need preparation time?”

Process-driven response:
“We’d be pleased to walk through our waterfall methodology on a follow-up call once we’ve reviewed your fund documents.”

Translation: They calculate waterfalls manually in Excel and need time to build models.

Partnership response:
“I can demonstrate our portal now via screen-share. Walk me through your carry structure and I’ll model a scenario in real-time.”

What this reveals: Real-time capability versus manual processes.

Question 3: “When I send a non-urgent question Friday at 4 PM, who responds and by when?”

Process-driven response: “Our SLA is 24 business hours for standard requests. You can also submit urgent matters through our priority ticket system.”

Translation: You’ll receive Monday afternoon response from whoever handles the ticket queue. Your “relationship contact” doesn’t personally monitor communications.

Partnership response: “Your Director responds directly, typically within 2-3 hours even on weekends for time-sensitive matters. For routine Friday afternoon questions, expect a substantive response by Monday morning. If they’re unavailable, their designated backup is [Name], and you have both contact details.”

What this reveals: Personal accountability versus SLA-driven processes.

Question 4: “How many mid-market clients have left your firm in the past 2 years, and why?”

Process-driven response: “We maintain very high client retention rates and are proud of our long-standing relationships.”

Translation: They won’t answer with specifics.

Partnership response: “We’ve had two departures in that AUM segment over 24 months. One was acquired by a $5B mega-fund that consolidated to their existing administrator. The other moved administration in-house after crossing $2B AUM and hiring a dedicated CFO. We can provide references from both. They left on good terms.”

What this reveals: Transparency and confidence versus deflection.

Question 5: “During audit season, what percentage of PBC items do you complete without requiring our internal team’s involvement?”

Process-driven response: “We work collaboratively with your team and your auditors to ensure a smooth audit process.”

Translation: Your team will handle 30-40% of audit work because the administrator lacks depth.

Partnership response: “Our target standard is 90%+ of PBC items delivered directly to auditors without GP team escalation. The ~10% requiring your input are items only you can provide: investment memos, board minutes, management fee calculations tied to side letters. We track this metric quarterly.”

What this reveals: True audit ownership versus collaborative overhead.

Use these questions with any administrator, including ZEDRA. If a provider deflects or pivots to marketing language rather than answering directly, you’re evaluating a process-driven model regardless of their positioning.

What To Consider Next

The differences between the process-driven and partnership-based models are not always immediately visible. They tend to surface over time, through additional validation work, slower decision-making and an increasing reliance on your internal team.

If several of these characteristics sound familiar, it may be worth taking a closer look at your current administrative approach and whether it remains appropriate for your fund’s requirements.

Andrew Dipkin works with mid-market private equity teams across the Americas to review their operational setup, identify areas of friction, and determine whether their current approach remains fit for purpose.

For teams evaluating whether their current operating model can continue supporting future growth, a more detailed diagnostic framework is available here. You can also contact Andrew directly to discuss your current approach.