The Long View: Peter Astleford and Conor Durkin are Debating the Growing Power of Depositaries, Post-AIFMD
The role envisaged under the Alternative Investment Fund Managers Directive (AIFMD) for depositaries, will alter the landscape of the hedge fund industry in Europe.
Under AIFMD a depositary will be generally required. No other third party (except auditors) will have this privileged position. The depositary will often be required to replace assets that are “lost” from safekeeping and carry out detailed monitoring and reconciliations of a fund’s cash flows, effectively acting as the policeman of part of the administrator’s functions. The new liability regime will result in an increase in fees.
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