How to Build a Fund Operations Team as Your Real Estate Fund Grows

How to Build a Fund Operations Team as Your Real Estate Fund Grows

Most real estate fund managers start out wearing every hat. The GP sources deals, manages investor relationships, handles accounting questions, and reviews reports. It works at the start, barely, and then it doesn't work at all.

At some point, growth demands a real operations team. The question is when to build it, what to build first, and how to avoid the mistakes that slow funds down rather than accelerate them.

The Problem With Building Too Late

The most common pattern is waiting too long. The fund grows, the operational load increases, and the GP absorbs more and more of it personally until something breaks. A report goes out late. A distribution gets miscalculated. An investor can't get a straight answer on their account. By the time the GP decides it's time to hire, the problems are already compounding.

Building operations reactively, in response to failure rather than in anticipation of growth, means the new hire is immediately in catch-up mode. There's no time for onboarding, no bandwidth to build systems, and no margin for the inevitable learning curve. That's a hard way to build a team.

The better approach is to think about operational capacity as a leading indicator, not a lagging one. Build the capability before you need it at full capacity, so it's ready when the demand arrives.

The Right Order of Operations

Not every operations role is equally urgent, and not every fund needs every role at the same stage. Here's a practical framework for how to think about sequencing.

The first area to address is fund accounting and reporting. This is where errors are most costly and where LP trust is most directly on the line. Whether through a fund administrator, an outsourced accounting partner, or an in-house controller, getting clean, reliable accounting and reporting infrastructure in place early is the highest-priority operational investment a fund manager can make.

For most funds in the early stages, the right answer is an administrator rather than a full-time hire. A qualified fund accountant with real estate fund experience is expensive, hard to find, and often more capacity than a growing fund needs full-time. An administrator provides that expertise at a fraction of the cost and scales as the fund scales.

The second area is investor relations and LP communication. As the LP count grows, so does the volume of inquiries, document requests, onboarding tasks, and routine communication. An operations or IR coordinator who can handle these touchpoints consistently frees the GP to focus on the activities that actually drive growth. This role often starts as part-time or fractional and grows into full-time as the fund scales.

The third area is deal operations and asset management support. Depending on the strategy, this might include property management oversight, construction coordination, lender relationship management, or acquisition support. The right timing and structure here depends heavily on the portfolio composition and how active the strategy is.

What to Outsource and What to Keep In-House

The build-vs-outsource decision deserves explicit thought at each stage of growth. A useful framework: keep in-house the activities where proximity to the business and proprietary knowledge create meaningful value. Outsource the activities where specialized expertise, technology, and scale matter more than internal familiarity.

Fund accounting and administration almost always fall in the outsource category early on. The expertise required is specialized, the technology investment is significant, and the volume doesn't justify full-time headcount until the fund is at meaningful scale.

Investor relationships, deal sourcing, and asset management decisions almost always belong in-house. These are the activities where the GP's judgment, relationships, and market knowledge are the core competitive advantage.

The hybrid that tends to work well for growing funds: a lean internal team focused on relationships and deal activity, supported by an administrator handling the operational infrastructure, with clear handoffs and communication protocols between the two.

Common Mistakes to Avoid

Hiring generalists for specialist roles. Fund accounting is a specialized skill. Hiring someone with general bookkeeping experience to manage a fund's accounting because it's cheaper tends to create problems that are expensive to fix. The same applies to compliance and tax.

Under-investing in systems. A growing fund that runs on email threads and spreadsheets has an operational ceiling. At some point, the lack of systems creates errors and inefficiencies that cost more than the systems would have. Building the right technology infrastructure, whether through an administrator's platform or purpose-built fund management software, before the volume demands it is almost always the right call.

Not defining roles clearly. As the team grows, unclear ownership creates gaps. Who owns investor communication? Who reviews reports before they go out? Who manages the relationship with the administrator? Defining these clearly, and revisiting them as the team evolves, prevents the kinds of operational failures that tend to surface at the worst possible moments.

Where Verivest Fits In

We work with fund managers at every stage of the growth curve, from solo GPs running their first fund to established managers building out a full operations infrastructure. The right model looks different at each stage, and we're happy to help think through what makes sense for where a fund is now and where it's headed.

Talk to the Verivest team