Private Fund Custody

According to the SEC, Registered Investment Advisors who have custody of their clients’ funds or securities must safeguard those funds. To comply, private fund issuers may use an independent qualified custodian to hold client assets.

Midland Trust Company is a qualified custodian that offers this service to private funds and organizations. 

WHAT WE OFFER

FULL CUSTODY

Midland executes on behalf of the fund and reports and stores documents

  • Checkmark Custody of assets and cash
  • Checkmark Register all assets in Midland’s name
  • Checkmark Processing all new purchases/liquidations
  • Checkmark Monitors all incoming and outgoing payments
  • Checkmark Provide fund-level statements to all investors of the fund
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DOCUMENT CUSTODY

Midland physically holds the asset's documents and offers quarterly reporting

  • Checkmark Physical custody of original documents (i.e., stock certificate)
  • Checkmark No re-registration of assets
  • Checkmark No cash custody or payment processing
  • Checkmark Essentially a “safety deposit box”
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What's the difference between full custody and document custody?

 
Full custody is our more robust service offering where Midland executes investments as directed by the Fund, and reports on all transactions within the fund account, including cash.
 
Document Custody is a vaulting service where Midland record-keeps digital and original documents. Both services provide quarterly statements of the asset/documents held in custody and transaction/vault activity to the underlying investors of the fund.
 
To learn more about Midland Trust's custody services offerings, set up a meeting or give us a call at 312-767-6863.
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Benefits of Custody Examination VS Financial Statement Audits

There are many benefits of custody examination vs. financial statement audits. Midland opens accounts at the fund level to hold cash and alternative investments. These alternative investments include private equity/debt, VC, and real estate. We process transactions for the fund and report all holdings and activity to the fund and its participants quarterly. Midland provides a customizable solution and pricing plan based on each fund’s structure and needs. We understand the Custody Rule requirements and are responsive partners to surprise examiners and fund administrators.

Midland does not endorse investments, give tax, investment, or legal advice. Therefore, we will never compete with you for your clients’ business. We act as a third party to your clients and their investment choices. At Midland, your relationship is important to us. You’ll be assigned a dedicated account manager who will directly work with you to provide the utmost service.

Contact Midland Trust today, and a member of our business development staff will discuss your fund-level custody needs. You may also call us at (312) 767-6863.

CONTACT US

Operating Your Private Fund

What are the responsibilities of each service provider to my Private Fund account?

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Private Fund Custody FAQs

How Does a Qualified Custodian Differ From a Fund Administrator?

The Custodian operates at the fund-level, while the Administrator operates at an investor-level. Think of the Qualified Custodian as the home base for the cash and assets of the fund. It is where all the transactions take place and are reported. These transactions can include the fund’s incoming subscriptions, investments, distributions, and more. Whereas, the Fund Administrator is responsible for collecting information and performance reporting for each respective individual investor.

How Does a Fund Manager Operate Their Account With Midland?

Midland has developed a custom dashboard for fund managers called Midland Dash. It allows the manager to upload investment documents, initiate an investment, pay expenses, and execute the fund’s transactions. Midland Dash is designed to let fund managers manage their private fund(s) quickly and efficiently. Auditors and investors can retrieve statements and historical transaction reports at any time.

What Kind of Reporting Does Midland Provide?

For funds to adhere to the Custody Rule, Midland sends reports quarterly. Formal, fund-level statements are furnished for the fund and its investors. These statements can be delivered to most of the investors’ roster for a given quarter. In the statement made available to the fund manager, sensitive information, such as the investor’s name on contributions, is redacted.

What is Included in Midland's Private Fund Custody Service, and What Are the Fees?

Custody Services provided by Midland can be tailored to your business’ operational, administrative, and compliance needs. Whether you need to check a box for your examiners, completely outsource your “back-office” or want to deliver more value to your investors by providing transparency – Midland’s Private Fund Custody solutions can be customized to fit your needs. There is no “one-size-fits-all” approach here. Reach out to start a conversation with us, and we can present you with a solution that keeps your costs low and your fund compliant.