Unfinished Audit Layer at iCapital
VP of Product at iCapital on streamlining alternative investment administration
The unfinished audit layer shows how manual alternative fund operations still were, even inside a scaled platform. Fee logic was automated first, but trust still came from people reconciling outputs against administrator files and earlier Excel models. That matters because feeder fund economics depend on getting many small, bespoke fee terms exactly right across funds, share classes, firms, and investors, with errors quickly turning into finance, servicing, and partner disputes.
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The actual control process was still manual. Finance teams first calculated fees in Excel before the engine existed, then later compared the engine output against fund administrator calculations, drilling into breaks at investor, fee, or total fund level when numbers did not tie.
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This was hard to automate because fee schedules were highly customized. The engine had to account for fund level, share class, firm level, brokerage versus advisory, inside versus outside, advance versus arrears, commitment based versus NAV based logic, plus date based changes and breakpoints.
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The broader pattern across iCapital was the same. Subscription, reporting, tax, and document workflows were becoming structured and partly automated, but the ecosystem still depended on fragmented administrator systems and different databases, which kept reconciliation and exception handling labor intensive.
The next step is turning these manual tie outs into system level approval workflows. As feeder funds give way to more direct and registered products, the winning platforms will be the ones that can ingest administrator data, auto flag mismatches, and let operations teams resolve only the true exceptions, which pushes the business closer to software margins.