Read Mike Trinkaus’ analysis, “GPs Must Stay Vigilant After Their Fund Administrator Is Acquired; Co-Sourcing Offers A Path Forward” in Private Funds CFO here, and find a summary below.
Co-Sourcing as a Strategic Response to M&A Risk in Fund Administration
Core Argument:
Fund administrators are increasingly being acquired by larger firms, leading to a degradation in service quality for General Partners (GPs). This includes loss of personalized service, increased staff turnover, and diminished operational reliability. Co-sourcing is presented as a resilient alternative to traditional outsourcing.
Key Risks of Administrator M&A:
- Loss of tailored service and institutional knowledge
- Increased turnover and poor communication
- Decline in accuracy, deadlines, and execution quality
- Disruption during critical fund cycles
Co-Sourcing Defined:
A hybrid model where GPs retain control over their systems and data, while fund administrators operate within the GP’s infrastructure. This contrasts with traditional outsourcing, where administrators use a third-party platform.
Advantages of Co-Sourcing:
- System Continuity – GPs avoid dependency on vendor platforms.
- Team Transparency – Easier to monitor service quality and staff changes.
- Operational Resilience – GPs can switch administrators without re-platforming.
- Custom Reporting & Controls – Tailored to GP needs, not standardized.
- Embedded Collaboration – Administrators work within GP workflows for better alignment.
Strategic Implication:
Co-sourcing is not just a tactical fix but a strategic imperative. It enables GPs to maintain control, ensure transparency, and protect investor experience amid industry consolidation.
Conclusion:
GPs should proactively assess whether their fund administrators offer true co-sourcing capabilities. In a volatile M&A environment, co-sourcing provides a buffer against disruption and a path to operational resilience.
