Private Fund Custody

According to the SEC, Registered Investment Advisors who have custody of their clients’ funds or securities must safeguard those funds. This is a requirement set by the Custody Rule. 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. Our private fund custody solutions add an intrinsic value of transparency and separation per the Custody Rule.

Benefits of Custody Service With Midland

Expand Your Investment Options

Midland is a premiere qualified custodian, focusing on providing clients with as many opportunities to invest as possible. At Midland, investments can be made in both traditional and alternative assets.

Responsive, Personalized Service

Our firm understands the Custody Rule requirements and will be responsive partners to surprise examiners and fund administrators.

Whether you are operating an established fund with a significant number of assets under management or launching a new fund and planning to raise capital, Midland can help. Midland helps you meet custody requirements and investor demand for transparency.

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.

24/7 Access

Your clients can diversify their holdings through their Midland Dash online portal. With the portal, they can also transfer money, gain access to account reports, and more!

Through Midland Dash, your clients can authorize you to track their account opening and funding, as well as give you access to their current holdings and account activity.

Midland Trust Company Provides the Following Ongoing Private Fund Custody Services:

Full Custody

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

Document Custody

  • Physical custody of original documents (i.e., stock certificate)
  • No re-registration of assets
  • No cash custody or payment processing
  • Essentially a “safety deposit box”

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.

Operating Your Private Fund

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

Legal

Fulfills any legal documentation or regular registrations.

Forms private fund and entities

Registers Investment Advisor

Files ADV form

Fund Administrator

Performs reports for investors and reviews investor onboarding.

Produces NAV

Reconciles portfolio

Performs accounting for portfolio

Furnishes investor statements

Auditor

PCAOB-registered firm to administer surprise exam or full, annual audit.

Generates tax filing documents for manager and investors

Audits financials

Conducts surprise exam

Completes K-1s for investor

Prime Broker

Transacts in public markets (NYSE and Nasdaq).

Executes trades on public exchanges

Manages portfolio margins

Outsources trading

Qualified Custodian

Provides transparency and fulfills Custody Rule requirement.

Furnishes fund-level statements to the fund & investors

Executes transactions on behalf of the fund

Manages cash

Manages and stores investment documents

Private Fund Custody FAQs

How Does a Qualified Custodian Differ From a Fund Administrator?

How Does a Fund Manager Operate Their Account With Midland?

What Kind of Reporting Does Midland Provide?

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