UK-based independent AIFMD depositary INDOS Financial has recorded a 160 per cent increase in assets under depositary from September 2015 to end-September 2016 of USD8 billion to a total of USD13 billion. In the same period, client relationships have grown 70 per cent to 45.
INDOS CEO Bill Prew believes that the growth has come as a result of an increasing recognition by investment managers and investors of the value offered by an independent depositary.
“The value of the depositary beyond meeting regulatory compliance obligations should not be discounted,” says Prew. “Many managers initially viewed the appointment of a depositary as a box-ticking compliance exercise which would lack value. In fact depositaries are there to help safe-guard investor capital, and perform an important oversight function over compliance with fund rules.”
Prew says: “A number of managers initially hired depositaries based on pricing or whether their fund administrator offered it as a bundled service. This is changing. Managers realise that hiring a depositary based purely on commercials and convenience rather than service quality and transparency is a false economy. Equally, investors and managers are pushing for depositaries to be independent from the fund administrators – much of whose work they oversee.”
