Private Fund Custody

Equity Trust Company is a qualified custodian that offers PFC solutions to private funds and organizations.

 

WHAT IS 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.

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WHAT WE OFFER

FULL CUSTODY

Equity Trust executes on behalf of the fund and reports and stores documents

  • Checkmark Custody of assets and cash
  • Checkmark Register all assets in Equity Trust’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

DOCUMENT CUSTODY

Equity Trust 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 Equity Trust 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 Equity Trust 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.
 
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Benefits of Custody Examination VS Financial Statement Audits

  • Custody examinations are more limited as they focus on equity activities and investment existence, but not underlying valuations. 

  • Custody examinations tend to be less intrusive and time-consuming and therefore less expensive than financial
    statement audits which require more planning and assessment of risks.

  • Equity Trust opens accounts at the fund level to hold cash and alternative investments.

  • Alternative investments include private equity/debt, venture capital (VC), and real estate.

  • Transactions for the fund are processed and all holdings and activity are reported quarterly to the fund and its participants.

  • Customizable solutions and pricing plans are provided based on each fund’s structure and needs.

  • Understanding of Custody Rule requirements and responsiveness to surprise examiners and fund administrators.

 

Equity Trust's Commitment

  • Does not endorse investments or provide tax, investment, or legal advice.

  • Acts as a third party to clients and their investment choices, ensuring no competition for clients’ business.

  • Values client relationships, assigning a dedicated account manager to provide personalized service.

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 Equity Trust?

Equity Trust has developed a custom dashboard for fund managers called Equity Dash. It allows the manager to upload investment documents, initiate an investment, pay expenses, and execute the fund’s transactions. Equity 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 Equity Trust Provide?

For funds to adhere to the Custody Rule, Equity Trust 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 Equity Trust's Private Fund Custody Service, and What Are the Fees?

Custody Services provided by Equity Trust 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 – Equity Trust’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.

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