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SD-12.9 — Fund Accounting & NAV

Business Domain: BD-12 Investment Operations & Servicing (Back office) · Applies: BOTH

Purpose

Strikes the net asset value and maintains the fund-level books for the funds and vehicles the institution itself operates — as a manager, a general partner, or the sponsor of a pooled vehicle. Fund accounting takes the priced holdings of an operated vehicle, applies the fund’s income and expense accruals, nets fees, and divides by units in issue to produce the official NAV. SD-12.9 is that capability. It exists because an institution that operates funds — not merely invests in them — must keep those funds’ books and strike their NAV, a fund-administration capability distinct from keeping its own investor-side ledger. It is not the institution’s own accounting book — that is SD-12.2 ABOR, the investor-side ledger; SD-12.9 keeps the operated fund’s books — and it is not holding-level valuation — SD-08 determines the value of an individual holding; SD-12.9 aggregates those values into a fund-level NAV. An institution that operates no funds of its own leaves SD-12.9 dormant.

SD-12.9 carries fund administration across the whole life of an operated vehicle, including its terminal lifecycle — the wind-down at the end of a fund’s term. Fund wind-down is the operational bookend to fund formation: the terminal NAV, the final fund accounts, the terminal distribution and the operational support of the vehicle’s dissolution are all fund-administration acts, exercised by exactly the institutions that activate SD-12.9 and no others.

Service Operations

  • NAV calculation — strike the net asset value of an operated fund: aggregate the priced holdings, add other assets, subtract liabilities, fees and expenses, and divide by units in issue.
  • Expense and fee accrual — accrue the fund’s management fee, performance fee, and operating expenses into the NAV between payment dates, on the fund’s accrual policy.
  • Fund-level bookkeeping — maintain the operated fund’s general ledger and books — capital accounts, income, expense, and the asset and liability ledgers.
  • Capital-account maintenance — maintain each investor’s capital account in the fund — contributions, distributions, allocated income and gain, and the closing balance.
  • NAV review and sign-off — run the controlled review of a struck NAV — tolerance checks, price-movement validation, prior-period comparison — and obtain sign-off before the NAV is published.
  • Income equalisation and unit pricing — apply income equalisation and price units for subscriptions and redemptions where the vehicle is open-ended.
  • Pricing-point and dilution adjustment — apply the pricing-basis and anti-dilution adjustments (swing pricing, dilution levy) the fund’s policy specifies.
  • Fund wind-down and terminal close — at the end of an operated fund’s life, strike the terminal NAV, produce the final fund accounts and final capital-account statements, process the terminal distribution and the final-waterfall close (the carried-interest and clawback calculation with SD-12.11), and support the vehicle’s dissolution — the legal dissolution filings flow to SD-14.9 Legal & Contract Management, the LPAC consent and term extensions to SD-16.1 Corporate & Fund Governance, and the final audit to SD-14.8 Internal Audit.

Inputs and outputs

  • Inputs: the priced holdings of the operated fund from SD-08 and SD-12.2; fee and expense amounts from SD-12.11; income from SD-12.7; the per-class hedge P&L from SD-11.3 FX Execution & Share-Class Hedging (for currency-hedged classes — the hedge cost/benefit borne by each hedged class, applied at the class-NAV strike); securities-lending revenue from SD-12.13 Securities Lending Operations (net lending fee income accrued into the fund’s NAV per unit, allocated at class grain); corporate-action and distribution effects; the fund’s accrual and pricing policy.
  • Outputs: the official fund NAV and NAV per unit, the fund books, and investor capital accounts — consumed by SD-09 Performance & Analytics (return measured from the NAV series), SD-16.2 Owner & Investor Reporting (the capital-account statements and investor-reported NAV-per-unit figures issued to the fund’s investors), SD-16.4 Financial Reporting & Disclosure, SD-12.10 Reconciliation, and SD-14.8 Internal Audit. The NAV-per-unit series and the ongoing-charges figure are the source data for the regulatory disclosure documents (the KID / PRIIPs disclosure, UCITS KIID, fund factsheet) produced by SD-16.2; the document is the rendering of these figures of record — the disclosed figure’s integrity flows from the deterministic provenance of the underlying class-grain E-07 record.

Entities

  • Consumes: E-07 Valuation (method = observable_price / method = mark_to_model / method = manager_mark — the priced holdings the NAV is struck from), E-04 Holding / Position (book = abor — fund accounting strikes the NAV from the accounting book), E-06 Cash Flow Event, PM-01 Fund & Vehicle (where the operated vehicle is a private-markets fund), FO-01 Fund Product (where the operated vehicle is an open-ended registered fund — the issued-product record whose dealing terms govern the NAV strike timing and whose fund_product_id anchors the NAV record), FO-02 Share / Unit Class (the class-level reference record — share_class_id anchors each class-level NAV record; hedged and class_currency identify which classes require the currency-hedge P&L applied at NAV strike), FO-03 Investor Unitholding (the live operational register from which units in issue per class is read at the dealing cut-off; the sum of FO-03 units_held across all investor records in a class at the cut-off instant is the operational input to the NAV strike — the struck figure of record is then stored on the class-grain valuation record SD-12.9 owns with method = manager_mark; that stored units_in_issue is the canonical divisor for any historical NAV, not a re-sum of current register rows; FO-03 is also consumed for the ex-date units snapshot used in income equalisation), FO-04 Dealing Order (the struck NAV per unit on each settled order cross-references the class-grain valuation record SD-12.9 owns; settled subscriptions and redemptions are the dealing events the NAV-per-unit divisor update derives from at the dealing cut-off), FO-05 Fund Distribution Event (the ex-date distribution declaration that triggers the post-distribution NAV-per-unit strike — SD-12.9 strikes a new class-grain valuation record at the ex-date with the NAV reduced by FO-05 distribution_per_unit), FO-06 Fee Accrual (the computed fee figure of record produced by SD-12.11 — SD-12.9 books the net_charge from FO-06 into the struck NAV; the accrued fee reduces NAV per unit each period; SD-12.9 reads FO-06’s net_charge by fee_type to determine the expense deduction applied at the NAV strike), FO-08 Service-Provider Appointment (reads the role = fund_administrator appointment row for each fund to identify the appointed administrator delivering the NAV feed and fund books — the counterparty identification for the administered-vehicle NAV workflow), PM-10 Fund Terms (the fee and carry terms accrued); the priced holdings of the operated fund from SD-08 and SD-12.2; the SD-12.7 income; the SD-11.3 per-class hedge P&L (the FX-hedge cost/benefit produced each NAV cycle by SD-11.3, applied at the class-NAV strike for currency-hedged classes identified by FO-02.hedged = true); the SD-12.13 securities-lending revenue (net lending fee income allocated to the fund at class grain, accrued into the class NAV at the strike); FO-09 Omnibus Account (reads FO-09 to identify servicing_fee_type = 12b-1 omnibus-account fee terms that are paid from fund assets and must be included as a fund-level expense in the OCF/TER reconstruction — 12b-1 fees reduce the fund’s NAV as an accrued expense and are booked alongside management-fee and OCF-eligible operating expenses; revenue-share and sub-TA payments not paid from the fund are excluded from the NAV deduction); FO-10 ETF Creation/Redemption Order (settled ETF creation/redemption orders update the fund’s units-in-issue divisor — creations increase shares outstanding, redemptions decrease them; struck_nav_per_unit on FO-10 cross-references the class-grain E-07 Valuation (method = manager_mark) record SD-12.9 owns for that dealing date).
  • Owns: the fund NAV as a struck value — recorded as an E-07 Valuation (method = manager_mark) on the operated fund: the official struck NAV of a vehicle the institution operates. It shares the manager_mark value with SD-08.3 Private-Asset Valuation but is distinguished by producing capability — SD-12.9 strikes the NAV of an operated vehicle (the source side, with its PM-13 investor capital accounts), where SD-08.3 records the mark the institution consumes as an investor in an externally-managed interest. The holding-level valuations are owned by SD-08. SD-12.9 also owns the NAV per unit at share/unit-class grain — the class-level E-07 record (unit_class_id FK → FO-02, method = manager_mark, units_in_issue populated as the divisor at the moment of the strike); this is the investor-reported figure of record, carrying full provenance from the holdings valuation through the fee, hedge P&L and securities-lending revenue accruals that determine the per-unit amount. Plus PM-13 Investor Capital Account — the manager-side per-investor, per-period running balance (contributions, distributions, allocated income and gain, closing balance) in a fund the institution operates, the ILPA Capital Account Statement made first-class. PM-13 is distinct from PM-06 LP Commitment (the investor’s own commitment into someone else’s fund), because here the institution is on the manager side; it activates only when the institution operates funds. Plus FO-11 ETF Creation Basket (Portfolio Composition File) — the daily-published basket composition record specifying the securities and cash that constitute one ETF creation unit on each dealing date; SD-12.9 produces and publishes the PCF as part of its fund-administration output, derived from the fund’s holdings and the index target each dealing day.

Standards

  • IFRS / local GAAP — the accounting standards an operated fund’s books are kept to; IFRS 13 governs the fair-value measurement of the fund’s holdings.
  • GIPS — where the operated vehicle’s performance is presented to standards, the NAV and the fund books are the input data GIPS calculation rests on; GIPS compliance is governed by SD-09.6.
  • ILPA — for an operated private-markets fund, the ILPA Reporting Template (v2.0, January 2025; its Capital Account Statement section and the fee, expense and carried-interest detail it carries) standardises the statements issued to the fund’s investors.

Open extensions

  • The Service-Operation-level input/output contracts.
  • The fee-and-carry waterfall on PM-13 — the management-fee, carried-interest and hurdle mechanics that drive the per-investor allocations.
  • The open-ended-vehicle unit-pricing and swing-pricing sub-model.
  • The fund-wind-down terminal-lifecycle sub-model — the dissolution sequence, the terminal-NAV restatement rules, and the cross-domain hand-offs to SD-14.9 and SD-16.1.

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