Hedge fund accounting
Management Company Accounting Is Not Fund Accounting
The fund and the management company are related, but they are different businesses with different books, cash flows, responsibilities, and risks.
August 5, 2026 · 7 min read · Binish Bulsara, HedgeArc Fund SolutionsThe administrator does not maintain the manager's books
The fund administrator generally maintains the official books and records of the investment vehicles under its engagement. That work does not ordinarily replace accounting for the management company or GP. The manager still needs to record management-fee revenue, payroll, professional fees, technology, insurance, travel, occupancy, owner activity, and other business expenses in the correct legal entity.
Cash planning is part of accounting
An emerging manager can show healthy fund performance while the management company remains under financial pressure. Management fees may be collected quarterly, expenses may be paid monthly, and hiring or technology commitments can change the runway quickly. Monthly financial statements, a rolling cash forecast, and budget-to-actual reporting help the owners see when the business—not the portfolio—needs attention.
Entity discipline matters
The fund, management company, and GP should not become a single pool of cash and expenses. Clear entity coding, documented allocations, approval controls, reconciliations, and supporting records reduce confusion and make audit, tax, investor diligence, and owner reporting more reliable.
Build records the future CFO can inherit
The objective is not only to close the books. It is to create a repeatable monthly process with defined source documents, review steps, explanations, and outputs. A future internal CFO should be able to understand the history and continue the process without reconstructing it from bank statements and email.