Depositary assets at INDOS Financial have grown to USD25 billion, only three months since the service provider passed the USD20 billion milestone on 1 February.
According to Bill Prew (pictured), CEO of INDOS Financial, this continuing, rapid rate of growth is partially a function of INDOS’ competitive and tailored fee structure where, in contrast to the fixed rates charged by many providers of depositary services, rates decline as managers’ assets grow.
“More generally,” says Prew, “our message about the virtues of independence is getting through. INDOS firmly believes that depositary services are more effective and will add value when handled by an independent provider rather than bundled with fund administration and managers across the alternative investment space appear increasingly to agree.”
Underscoring this assertion, Prew points out that while the majority of INDOS’ depositary assets arise from new/developing investment funds, over 45 per cent, representing over USD11 billion (17 funds), have transferred from other service providers in the last three years.
“It would be wrong to infer that INDOS is carrying all before it given that we’re a USD25bn participant in a USD1 trillion+ European alternatives industry, and furthermore, some clients have transferred from administrators who have chosen to withdraw from the depositary space,” Prew says. “Nonetheless, the importance to managers of regular engagement with their depositary service provider cannot be overstated given that one of the key roles of a depositary is to oversee the output of the administrative function and flag up issues.”
“Many managers who transfer business to us say that formerly, extant problems went either unidentified or unreported and therefore recognise the value our independent service provides”.
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