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Types of fees - Coggle Diagram
Types of fees
Custodian
Fees will be market led by jurisdiction however a common pricing model is ad valorem for these services
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The requirement to appoint a custodian will depend upon the jurisdiction of the fund and the category of fund selected
A custodian is a financial institution that holds customers securities for safekeeping to minimise the risk of theft of loss
Also ensures that those assets are only dealt with in a manner allowed by the fund offering docuemnts
Since they ar responsible for the safety of assets and securities that may be worth hundreds of millions or even billions of dollars, custodians tend to be large and reputable firms
Custodians are generally subject to regulatory obligations themselves, whether under applicable banking and/or investment regulation to ensure that their duties are aligned with general investor protection rules
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When structuring a fund, management fee structuring is key
All fees must be transparent to ensure that an investor understands what proportion of funds invested or profits generated will be utilised towards paying fund principals such as the fund manager, administrator and custodian