INDOS Financial’s ‘assets under depositary’ in closed-ended private equity, real estate, infrastructure and debt funds now exceed USD10 billion. The new total, spread across 30 clients, splits to USD5.4 billion (private equity), USD3.2 billion (real estate), USD1.4 billion (infrastructure/debt).
Overall INDOS Financials assets exceed USD35 billion from 75 clients represented by some 145 funds.
“INDOS Financial is the only independent depositary in the alternatives space with the experience to service both hedge funds and other alternatives (including private equity, real estate, infrastructure and debt funds),” says Bill Prew, INDOS founder and CEO. “Having initially concentrated on the open-ended hedge fund sector following the introduction of AIFMD, our investment programme, initiated in 2015 and aimed at developing depositary services for closed-ended funds, is now paying off.”
INDOS’s continued growth reflects the increasing requirement of institutional clients for proper operational oversight which enhances fund governance. The independent depositary model is in strong demand as asset managers increasingly question the level and quality of service they are receiving from their depositaries, the majority of which are offered as a minority part of a packaged service with fund administration taking precedence.
“In our experience, firms complain about a lack of engagement by their depositaries and that any reporting lacks detail, raising concerns about whether the whole process is simply a box-ticking exercise,” Prew adds.
Concerns have also been raised about the potential for conflicts of interest in the packaged, as opposed to independent, depositary model and, at the same time, investors in the private funds market are becoming more diligent during the fund selection process, especially when reviewing fund operations and the broader control environment.
“These and other factors such as the increasing requirements of fund directors for reliable, detailed information about what is happening on an operational level at the fund, are all contributing to the strength of the independent depositary model and driving the growth of INDOS Financial,” says Prew.