By Jose Goicoechea, Head of Digital and Commercial AI, and Yashendu Joshi, Head of COE, Artificial Intelligence
We like to describe AI as a tireless digital specialist that augments our human experts. And, in our view, one of the most immediately impactful areas where this specialist is at work is in the complex, high-stakes world of fund administration.
The challenge: The traditional fund admin bottleneck
For anyone leading operations in hedge funds, private equity or venture capital, the traditional challenges of fund administration are all too familiar. The workflow has long been a manual-heavy process, reliant on teams of highly skilled people sifting through a mountain of disparate documents – limited partnership agreements (LPAs), private placement memorandums (PPMs), subscription documents, and capital call notices.
This process, while essential, is fraught with potential for human error and operational bottlenecks. It’s time-consuming, costly and carries inherent risks that can impact everything from net asset value (NAV) calculation and reporting to investor confidence. In today’s fast-paced market, this legacy model is simply no longer sustainable.
The solution: AI-driven document intelligence in action
This is precisely where AI transitions from a concept into a powerful operational solution.
For example, at IQ-EQ, we’re deploying AI-driven document processing and data extraction to revolutionise this workflow. Using a combination of natural language processing (NLP), which allows the AI to understand context, and optical character recognition (OCR), which lets it read documents, we can automate the capture of critical data points with incredible speed and accuracy.
A mini case study: The evolution of a capital call
To see the tangible difference, consider the journey of a single capital call notice:
The “Before” process
- An analyst receives the notice as a PDF
- They must manually open the document, read it, and find the key data points: the due date, the exact amount, banking details, and the specific investor
- They then manually enter this information into the firm’s system
- For quality control, a second analyst must repeat the process to verify the data
- This two-step, manual process for a single notice can take significant time and is susceptible to transposition errors, especially when processing hundreds or thousands of notices under pressure
The “After” process with AI
- The capital call notice PDF arrives
- The AI system instantly ingests it, reads the document, and identifies and extracts the critical data points in seconds
- It validates this information against existing records in the administrator’s system, flags any discrepancies, and automatically populates the required fields for a final, single verification by a human expert
- The analyst’s role shifts from tedious data entry to high-level oversight and quality assurance. The entire process is faster, more secure, and dramatically more scalable
The benefit: More than just speed
The payoff from this transformation is multi-faceted and profound. It isn’t just about speed; it’s about drastically reduced manual data entry, faster processing times for critical fund events, and fundamentally improved data accuracy for NAV calculation and investor reporting.
This enhanced data integrity ripples across key fund services, from portfolio monitoring to transfer agency, creating a more robust and reliable foundation for everything the administrator does.
By automating the mundane, a fund administrator can empower its experts to focus on what truly matters: managing complexity, advising clients, and driving value.
