Migrating your fund to Carta

Migrating your fund to Carta

Author: Andre Lopez
Read time:  3 minutes
Published date:  June 18, 2024
There are several reasons why funds change fund administrators. Here’s a guide to understanding when, why, and how to switch.

Why do funds change their fund administrators?

Funds switch fund administrators for a number of reasons: The GP might want to move to a firm with better software to enhance efficiency and minimize dependency on spreadsheets. LPs might request a fund administrator with better reporting. Additionally, a fund manager might simply want to explore partnering with a new fund administration team. 

Choosing whether and when to move requires careful evaluation of the cost and benefits of a transition. This article outlines points you’ll want to consider if you’re thinking about changing fund administrators.

Benefits of changing fund administrator

Changing to a provider that best matches the needs of your fund structure and goals—and that runs on a modern tech stack—can give fund managers an edge over their competition. Benefits to consider when making the switch include:

  1. Better service: Fund administrators provide various levels of support and software. Depending on your experience, staffing, and the assets you advise, you may want to change providers to receive a higher-touch service, obtain specialty expertise, or use a more sophisticated software platform.

  2. Building trust with your LPs: A skilled fund administrator ensures that your accounts and investor reporting are in order, helping you build and maintain good relationships with your investors.

  3. Overall savings: Consider the cost of the provider alongside the savings you might experience by switching to a fund administrator with more support, better technology, or a stronger reputation.

Making a transition between fund administrators: Key considerations 

As the fund manager, it’s ultimately your responsibility to execute a smooth transition when changing fund administrators, to ensure limited disruption for investors and the fund. Here are a few points to consider before making the switch: 

  1. Data transition: The quality of your data determines how smooth your transition will be. Make sure the new fund administrator has time-efficient processes in place to manage the transition of unstructured data. 

  2. Service: In pitches, fund administrators showcase their best account management teams. But it’s possible for accounts to be subject to varying standards of care. To find out more about the provider’s service, get a referral to an existing client and ask about their experience, as well as how the provider measures customer success.

  3. Fundraising: You may be already exploring raising your next fund. Consider completing the migration beforehand, as potential LPs may want to diligence your fund administrator. 

  4. Legal and regulatory compliance: In an increasingly regulated investment environment, it’s more important than ever for your fund administrator to remain up to date with relevant regulations, and to be capable of meeting new reporting demands and accounting and tax standards. 

  5. Tech stack: As fund administration moves to the cloud, you may want to choose a provider that doesn’t rely on outdated legacy systems and technology. A partner with sophisticated tech infrastructure can often deliver faster, more accurate reporting.

  6. Scalability: It’s increasingly common to see funds set up across multiple jurisdictions, which requires support for an international LP base. If you expect this to be the case for your fund, choose a provider with a global presence and experience servicing funds with an international LP base.

  7. Communication: In many cases, fund managers switch fund administrators following feedback from the fund’s LPs. Evaluate a prospective fund administrator’s investor communications system to determine whether it can enable a smooth transition of investor data and increase transparency into the fund’s performance through data and analytics. This level of service will help build better relationships with your investors and increase LP loyalty. 

Making the switch

Below is a guide to how Carta plans migration for fund administration clients who switch to our fund administration services. Whether you’re migrating just one fund or multiple funds and SPVs across jurisdictions, Carta identifies achievable milestones and provides a project management team to guide you through the process end to end. 

Step-by-step guide to migrating fund administrators

Step  1: Book a call with Carta to understand how our tech-enabled platform can support your fund

Step 2: Meet your Account Director, who will guide you through the onboarding process and serve as your first point of contact for all future fund administration inquiries.

Step 3: If your fund requests KYC as-a-service, we’ll request the necessary information to conduct KYC checks on your LPs.

Step 4: Upload your fund’s historical financial data, LP data, and other details for our team to review and verify. 

Step 5: Carta begins the process of building out your fund platform and migrating your data. Our team will analyze historical financials and work with you along the way to ensure a smooth transition for the fund and investors.

Step 6: Your fund is ready to go live! Our team will demo the populated platform and show you how to use its features.

Talk to an expert

Considering changing your fund administrator? Book a call with a member of our team.

Simplify your back office with Carta
Talk to an expert

Author: Andre Lopez
DISCLOSURE: This communication is on behalf of eShares Inc., d/b/a Carta Inc. ("Carta"). This communication is for informational purposes only, and contains general information only. Carta is not, by means of this communication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services nor should it be used as a basis for any decision or action that may affect your business or interests. Before making any decision or taking any action that may affect your business or interests, you should consult a qualified professional advisor. This communication is not intended as a recommendation, offer or solicitation for the purchase or sale of any security. Carta does not assume any liability for reliance on the information provided herein. ©2024 eShares, Inc. dba Carta, Inc. ("Carta"). All rights reserved. Reproduction prohibited.