JTC, a global provider of institutional and private client services, has picked UK-based Indos Financial to provide it with an independent depositary service for alternatives.
The deal will separate the depositary service element from the fund administration service element, reflecting other deals done recently by Indos with firms looking to meet requirements of the EU AIFM Directive.
Authorised by the UK Financial Conduct Authority (FCA) as an AIFMD depositary in January 2014, Indos claims that over 50 funds with more than $9bn in assets are using its services – including both EU and non-EU managers offering open and closed ended alternative investment fund strategies.
Stuart Pinnington group head of Institutional Client Services at JTC noted that while many managers would have relied on a depositary affiliated to a fund administrator at the time AIFMD came into effect, there is now enough experience dealing with the regulatory regime to allow consideration of independent depositaries.
JTC has some £47bn ($70bn) under administration overall according to recent figures, and serves clients through local offices in Argentina, Brazil, British Virgin Islands, Cayman Islands, Guernsey, Jersey, Luxembourg, Malta, Mauritius, New Zealand, South Africa, Switzerland and the UK, as well as USA representative offices in Miami and New York, and alliance offices in Hong Kong, Labuan, Malaysia and Singapore.
Indos announced a similar deal with Cantab Capital Partners LLP in the UK in the past week, to provide depositary services to its CCP Quantitative Fund and CCP Core Macro Fund hedge funds.
Indos said the appointment marked the third depositary switch to itself in the past six months from three different depositaries, of which two represent funds with assets in excess of $1bn.
Bill Prew, CEO of Indox, said: “We are delighted to be working with Cantab Capital. Increasingly managers are recognising the benefits of an independent depositary solution and we look forward to delivering our transparent and value-add service to the Cantab Capital funds.”
Reflecting the view expressed by Stuart Pinnington at JTC, Fraser McIntyre, partner and COO of Cantab Capital Partners, said the appointment came after it reviewed the existing use of a depositary affiliated to its fund administrator, and decided that more value could be added by using an independent depositary such as Indos Financial.
““Following the introduction of the AIFMD, like many managers we initially appointed a depositary affiliated to our fund administrator. Almost two years on, we recognise that independence between the depositary and the fund administrator will add more value to our investors, the funds’ directors and our business. Indos has established an excellent reputation as an independent depositary. We have been impressed with their management of all aspects of the transition and look forward to working with the team.”