Within the hedge fund industry it is standard for funds to hire outside third parties to conduct processes that are vital to their smooth operation. Hiring an outside service provider allows the hedge fund to stay focused on what it does best or is trying to do best, implement the investment strategy successfully. Commonly utilized third party service providers include: capital raisers, administrative (back office) services, marketing, and human resources. In this post third party hedge fund administrators will be discussed. The hedge fund administrator usually provides back office services to the hedge fund. The back office services hedge funds require include: monthly and quarterly accounting for redemptions and contributions of investors, investor subscription paperwork, calculating fees, being responsible for financial reports and records, assisting auditors during an audit of the hedge fund, and offshore administration such as FACTA (Foreign Account Tax Compliance). With the hedge fund focusing on the investment strategy and its successful implementation, it can be ensured that new funds are being successfully and smoothly transitioned into the portfolio with the use of an administrator. The capital raisers focus on pitching the portfolio manager's investment strategy and pedigree to ensure AUM will cycle into the fund. Then the hedge fund administrator focuses on the subscription and contribution process for the new investor and all aspects related to the back end activities in a hedge fund thereafter. Third party administrators are crucial for the smooth operation of hedge funds. Having administration outsourced (so to speak) allows the investment team and PM to stay focused. Third parties hired by hedge funds can be looked at as though they are a different function inside the hedge fund. The best third parties are approached by the hedge funds as though they are an extension of the fund itself. The most operationally efficient and customer centric funds approach their administrators and third parties this way. Without the aid of back office administrators hedge funds would not be able to operate as smoothly and as efficient as possible while economies of scale is being utilized.