246 The Business of Value Investingwith setting up value investment partnerships. The costs might be a
bit more up front, but using such a fi rm could eliminate additional
costs down the road. Also, if investment capital is going to be
sought out initially from people other than friends and family, legal
documents from a well - established and recognized fi rm can prove
benefi cial and offer a sense of comfort to faraway investors.Fund Administrator
The fund administrator handles all the essential maintenance of the
investment partnership once the legal framework has been estab-
lished. Legal documents must be prepared fi rst, as the fund admin-
istrator uses them to set up the investment partnership according
to its legal terms and conditions. The fund administrator is respon-
sible for the processing of new investor subscriptions, the monthly
accounting of the partnerships results, any future allocations or
redemptions by existing investors, and everything in between.
Again, if the initial investment partnership is beginning with a
few investors and the partnership won ’ t initially take in new inves-
tors throughout the year, it ’ s not impossible for the basic fund cal-
culations to be done in - house. However, once the partnership grows
and new investors decide to invest throughout the year, it may be
best to assign this task to a fi rm.Fund Custodian (Broker)
There are many ways to handle the brokerage needs of the part-
nership. Obviously, a full - service broker will incur greater costs for
the partnership than using an online platform. But depending on
asset size and investment strategy, a full - service broker usually can
be more effi cient and valuable in the long run. Value investors love
special situation investment opportunities, and participating in
them effectively can be virtually impossible without a broker. Also,
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