Services

Fund Administration Service

Custom House offers a full administration service to many alternative investment and hedge funds, including funds of funds, managed accounts and managed account platforms, investing in a wide variety of strategies.

Once the fund has been established, Custom House will act as administrator to the fund, overseeing the day to day operations and liaising between the Investment Manager and/or Investment Advisor(s), Broker(s), Custodian and Payment Bank, Auditor, Regulatory Authorities and, if listed, the relevant Stock Exchange authorities.

Of course, Custom House is also happy to act for funds that wish to change their existing administrator for whatever reason.

Custom House will carry out the valuation of the fund, calculating the NAV of the fund and the NAV per share on a daily, weekly or monthly basis, or other frequency, as applicable, independently verifying the transactions, prices traded and current prices/valuations. Prices of assets will be obtained from independent sources, or the Manager or counterparties, as described in the Offering Memorandum, Memorandum and Articles of Association and the Pricing Policy.

Custom House will also handle subscriptions and redemptions, verify fees and commissions due to the various service providers and authorise all payments to be made by the relevant Custodian, Trustee or Payment Bank. Custom House will arrange for the fund's NAV share and share unit or price to be published in the media, if required. Custom House will also maintain all of the books, records and accounts of the fund, organise the audit file for the Auditor, oversee the audit process and arrange for the preparation of the annual and interim half yearly unaudited financial statements of the company.

Custom House can also provide full partnership accounting for Limited Partnerships ("LPs"), as required. For US partnerships, this will include arranging for the provision of K1's for US taxpayer investors.

Click on the links below for more information:

Custom House's Fully Integrated Administration System: PFS-PAXUS

Administration Fees and Annual Operating Costs

Personal Service

It is Custom House's objective to provide a comprehensive personalised administration service to all of its clients.

Custom House's administration department utilises a team structure, whereby, in the case of a run of the mill single strategy fund, one individual is appointed as the dedicated administrator of each fund, thus providing each client with a named individual - someone whom they can contact directly and with whom the client can develop a close co-operative working relationship. That individual administrator is a member of a team, which provides the back-up in the case of illness or vacations. Each team has its own team leader, who is responsible for the team's operation. These team leaders, in turn, report to a section manager or supervisor, who will handle any abnormal queries or problems and, in the last resort, the supervisor, who will handle any abnormal queries or problems and, in the last resort, the supervisors report to and consult with their deputy manager or the manager of Custom House's administration department.

For very large or more complex funds, for example, with multiple sub-funds, it is possible that more than one individual administrator would be responsible for the fund's account at Custom House - indeed, some fund clients are allocated a whole team to their account.

Registrar & Transfer Agency (Shareholder) Services

Custom House provides Registrar and Transfer Agency Services (otherwise referred to as "Shareholder Services") and, as such, maintains a copy of the share register and monitors the issuance, redemption and transfer of shares by shareholders and will liaise promptly with all prospective and existing shareholders, distributing offering documents, reports and financial statements as required by the fund and the investors. Custom House offers similar services to LPs and their limited partners.

Anti-Money Laundering ("AML")

In carrying out its obligations as Administrator, Registrar and Transfer Agent, Custom House will comply with all appropriate international and domestic anti-money laundering regulations.

Company Secretarial Services

If required, Custom House will act as Company Secretary and, as such, be responsible for maintaining all statutory books and records of the Company, including maintenance of the Board's Minute Book, as well as organising and arranging Board and Shareholder meetings and the Annual General Meeting. As Company Secretary, Custom House will also oversee the filing of annual returns and, if listed, ensure compliance with the ongoing obligations of the relevant Stock Exchange.

Outsourced Services

Often, Custom House will be required to outsource certain functions, such as pricing and risk analysis, as described below. Custom House will provide data and information feeds as required to the outsourced service provider, to help facilitate their operations and to enable them to download their reports, prices or other data back to the fund and the fund's Manager, through Custom House.

Pricing

For the more esoteric OTC derivative products, some funds will delegate the pricing function to specialist pricing vendors. Custom House has, or will, prepare interfaces with these vendors so that they can feed the necessary information to the vendors and download the prices provided by the vendors for inclusion in the calculation of the fund's NAVs.

NB. Custom House does not and will not provide any in-house pricing models or similar facilities for funds. This is because Custom House believes that one of, if not the primary function of an independent administrator is to try and independently verify the prices used when valuing the assets and the NAV of a fund. Although this is not always possible, Custom House believes it is certainly indisputable that, if the administrator is directly involved in creating the price of an asset, which would be the case if it produced the price out of its own in-house models, regardless of the source of any data input to models, then the "independence" of the administrator in the calculation of the NAV will have been completely compromised.

Risk Management Analysis

Some funds retain outside companies to carry out a risk analysis of the portfolio on a daily, weekly or monthly basis. Custom House will provide the data to the service provider and download the results, which can also be fed to the investment manager (see Risk Monitoring and Analysis).

Other Services

Custom House will feed data to other service providers - such as companies that provide performance-reporting tools.

Financial Statements

As a result of Sarbanes Oxley, auditors will no longer produce the financial statements, either for the Annual Audited Accounts or the Interim Accounts. Accordingly, Custom House will make arrangements for these to be produced for fund clients.

Fund Advisory Service

Structuring an offshore fund is a fairly complex procedure and there are a number of decisions that have to be made before you take the first steps. However, before those decisions can be made, several questions need to be answered.

With this in mind, Custom House offers a Fund Advisory Service to start-up managers, which has been designed to achieve five primary objectives:

· Help the prospective manager determine what his objectives are

· Help establish a fund that meets those objectives

· Eliminate the problems that the clients may have when trying to establish their own specialised offshore fund

· Ensure that the fund is set up at a reasonable and acceptable cost

· Do this as quickly and efficiently as possible

Please note that Custom House will not provide this service if the client has already approached or engaged a lawyer or other professional adviser to assist in the establishment of their fund, because having two advisers can, apart from causing dissension, often increase costs whilst failing to add value.

As already indicated, the first step is for the prospective manager to decide how and where the fund should be organised. In order to help such prospective managers, Custom House has designed a Questionnaire and a Memorandum entitled "Some Factors To Be Considered When Establishing An Offshore Fund".

We invite prospective managers to complete the Questionnaire because that will give us a clear idea of what the manager's objectives are and, indeed, the process of completing the Questionnaire may well help the prospective manager to determine what his objectives are.

When completing the Questionnaire, we invite the prospective manager to simultaneously read the accompanying Memorandum because many of the points made in the Memorandum relate to specific questions and will go some way to explaining why we have asked them.

We also advise the prospective manager that the Questionnaire has been designed to be "all things to all men (or women)" and, as such, there may be a question that is targeted at a Fund of Funds, which is not relevant in the context of a CTA Fund and vice versa. Therefore, if when completing the Questionnaire, you cannot understand what the relevance of a particular question is, just ignore it and we can sort that out later, if necessary.

Changing Administrator

Changing administrator is not a decision to be taken lightly. The changeover will consume substantial resources, particularly in terms of human and management resources, as well as time. The fund manager should carry out full due diligence on the other administrators under consideration and that due diligence should cut down candidates to two or three.Most administrators have relationships with clients that deteriorate for a variety of reasons, as a result of which the client fund decides that they wish to change administrators.

This could be because of personality clashes between staff of either the administrator, the manager or both, failure by the manager to raise sufficient assets to be of interest to the administrator, or, as was the case of several funds in 2008 and 2009, the fund's assets declined with the market to a level below that which the administrator is prepared to accept.