Since the 2008 financial crisis, hedge fund managers have faced conflicting pressures from investors.  On one hand, heightened pressures on fees have prompted some managers to outsource certain back- and middle-office functions to third-party service providers.  On the other hand, the crisis and concurrent frauds caused investors to demand that managers implement more rigorous controls over fund operations, custody of assets and reporting.  To provide investors an additional level of comfort, managers that outsource delineated functions to administrators typically replicate, or “shadow,” those functions in-house, enabling them to verify the quality of the administrator’s work.  However, this duplication of effort is costly and time-consuming.  Moreover, shadowing may distract managers from effectively performing other essential functions, especially investment management and investor relations.  Consequently, some managers have moved towards “partial shadowing” – monitoring and assuring the quality of certain outsourced work without replicating that work in-house.  A recent panel discussion sponsored by the Regulatory Compliance Association provided an overview of the current climate for administrator shadowing and addressed the pros and cons of a move toward partial shadowing.  This article summarizes the key takeaways from that discussion.