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About the guest:
Shalin Madan, Co-Founder of Formidium - a global fund administration platform serving venture capital, private equity, hedge funds, and alternative asset managers, with over $33 billion in assets under administration.
Shalin brings more than two decades of experience across both the front office and back office. He’s seen what happens when infrastructure is an afterthought, and what it looks like when it becomes a competitive advantage.
The Question Nobody's Asking
When selecting a fund administrator, most managers focus on price and brand recognition. But according to Shalin Madan, who oversees $33B+ across 900+ clients, there's a more critical question: Will they still be around in 10 years?
In today's landscape, many service providers haven't weathered a true down market. Before committing to a fund administrator, Madan recommends asking:
Are they cash flow positive, or VC-funded and burning through capital?
Is their pricing stable and realistic, or are they buying market share?
What happens if fundraising dries up—is their business model sustainable?
Technology Tells the Truth
Your administrator's tech stack reveals everything about their internal discipline.
The key indicators to evaluate:
✓ Integrated workflows - Automated financials should be standard, not a premium feature
✓ Audit and tax readiness - How seamlessly does their system prepare for year-end?
✓ Minimal Excel dependency - More spreadsheets = more process risk
"We're banning Excel at Formidium," says Madan. "The more spreadsheet work, the more chance of process risk. That's what technology is there to solve."
The Market Shift: What Your Administrator Sees First
Managing capital flows across hundreds of clients gives fund administrators a unique vantage point on market trends. Here's what Madan is spotting:
1. The Flight to Safety
Investors are consolidating around proven players—the Googles and Nvidias of the world. They're also moving into commodities backed by infrastructure logic (silver for AI data centers, renewable energy for tech giants).
2. Vertical Integration Accelerates
Google's recent $4.3B acquisition of Intersect Power signals a major shift. Tech companies are buying power infrastructure to secure their AI future. When the Magnificent 7 start acquiring utilities, you know the playbook has changed.
3. AI's Deflationary Pressure
Pricing power matters more than ever. One Philippine call center is planning to replace 50%+ of staff with AI voice agents in 2026. When AI costs pennies versus dollars per hour, traditional offshore arbitrage disappears.
What LPs Should Actually Be Asking
Most LP due diligence is still "check-box" oriented: Do they use one of three approved law firms? One of five administrators? ✓✓✓
The better questions:
→ Are service providers right-sized for this manager? (A $50M fund needs different infrastructure than a $2B fund)
→ How does the GP plan to survive for 20 years? (Durability > Branding)
→ What's the manager's operational infrastructure, not just their track record?
Pro tip: Even emerging managers should invest in 5 hours with an experienced consultant. The institutional investors are already doing this through Albourne and Axium—you should too.
The Scaling Paradox
Formidium went from zero to 1,000+ tax returns annually in a remarkably short time. The lesson? Rapid scaling breaks things if you're not careful.
Scaling isn't just about sales. It's about whether your non-sales functions can keep pace:
Can your cybersecurity infrastructure handle the load?
Are your billing and collections processes robust?
Do your hiring processes support quality at speed?
Is your receivables management keeping up?
"If you're only focusing on sales without focusing on the entirety of scaling, I promise you that's going to backfire," warns Madan.
The Bottom Line
In an industry obsessed with returns, operational infrastructure often gets overlooked—until something breaks. The smartest managers are asking deeper questions about sustainability, technology, and business model durability.
As markets shift toward AI, commodities, and vertical integration, having the right operational partner isn't just about compliance. It's about positioning your firm to survive and thrive for the next 20 years.
Connect with Shalin Madan:
Website: Formidium.com
LinkedIn: Shalin Madan
Want to dive deeper? Listen to the full episode to get all the insights.
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