Thursday, 24 July 2014
Last updated 58 min ago
Jun 24 2013 | 10:27am ET
James Caird Asset Management's former operations chief aims to profit from the European Union's looming new hedge fund regulations by setting up the continent's first independent hedge fund depository.
Bill Prew is seeking the approval of the U.K. Financial Conduct Authority for his Indos Financial. The firm will focus on small- and mid-sized hedge funds, allowing them to come into compliance with the Alternative Investment Fund Managers Directive, which will require offshore hedge funds that are marketed to European investors to appoint a third-party depository.
AIFMD will come into force across the EU on July 22.
"Unlike other depository businesses today, we will work with most leading fund administrators and perform 100% arms-length oversight," Prew told Financial News.
"There is an inherent conflict of interest in the established trustee model, where large banks provide depository services to an affiliated custodian or administrator," he added. "Post AIFMD, we expect the banks will focus on bigger hedge fund clients because capacity is limited, trustee fees are low and the potential revenue relative to the perceived risk is not significant."
That is where Indos' focus on smaller funds comes in. "They will find it difficult to appoint a provider, more so if they use an independent administrator, and will welcome an independent, flexible depository solution," Prew said.
Prew was chief operating officer at James Caird, and formerly served as European CFO at Barclays Global Investors.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…