Citi OpenInvestorsm Custody for Alternatives Managers

Comprehensive solutions for evolving markets

New regulations, investor demands for transparency, and a focus on managing counterparty risk mean that alternatives managers – whether Hedge, Fund of Hedge Funds or Private Equity, need to re-evaluate custody arrangements. With Citi’s custody solutions, alternatives managers can rationalize counterparty risk, segregate and protect assets, deliver comprehensive levels of reporting to investors and establish external connectivity with multiple providers. Citi’s custody offering for alternatives managers can be easily integrated into a manager’s middle and back office.

Benefits at a Glance

  • Global network with presence and market expertise in over 95 countries
  • Industry expertise to address specific needs of registered and unregistered funds
  • Integrated, scalable technology that provides real-time data availability for investor trades and positions
  • Full middle- and back-office support model servicing a wide range of fund types, fund structures and security types
  • Qualified custodian with deposits insured by the FDIC
  • Integration with 3rd party Prime Brokers and Administrators

Core Custody

Citi is a worldwide provider of custody solutions to global investors. Citi’s proprietary branch and agent bank network in over 95 countries provides coverage across 98% of the world’s market capitalization. As one of the largest custodians in the financial marketplace and with extensive knowledge in the alternative investments space, Citi has the expertise to deliver the custody services you require.

Citi’s scale, integrated technology platform and award-winning service delivers custody capabilities that are customized to support individual client trading strategies, help drive efficiencies and reduce operational risk.

  • Alternatives managers can establish cash and securities accounts for unencumbered assets. Securities are never co-mingled with Citi’s assets, and there is no re-hypothecation.
  • Interest bearing balances in the U.S. are FDIC insured up to $250,000, and non-interest bearing balances are 100% insured (until December 31, 2012).
  • U.S. balances are eligible for the Earnings Credit Program and can be used to offset custody fees.

Liquidity and FX

LA complete range of cash liquidity products and foreign exchange solutions are customized to the needs of individual clients.

  • Liquidity management products include on balance sheet deposits, third-party funds and directed agency managed accounts.
  • A full suite of FX solutions simplifies and streamlines transactional FX and hedging across the investment lifecycle.

Tri-Party Accounts

Segregated custody accounts can be established to hold cash and securities as pledge margin collateral.

  • Citi supports account control agreements where Citi will comply with the terms outlined in the Tri-Party Account agreement.
  • Secured party has direct access to view collateral positions and approve collateral movements. Citi has strong controls in place to help prevent unauthorized movements of collateral.
  • Pledgor may reinvest cash collateral into a wide range of money market funds through an on-line portal based on a pre-approved list of investments.

Fund of Hedge Funds

Citi offers custody accounts to hold Fund of Hedge Funds investments, in Citi’s nominee for the benefit of the fund.

  • Citi handles order execution for subscriptions and redemptions as well as transfers of funds.
  • Citi uses contract notes and statements from underlying managers to update the custody books and records with current price information.
  • Citi tracks outstanding receivables from redemptions, including holdbacks.
  • Citi provides reconciliation with underlying managers and monitors and handles corporate actions.

Private Equity

U.S. Dodd-Frank Wall Street Reform and Consumer Protection Act in conjunction with recent SEC rules places considerably stricter regulatory requirements on investment advisors of private equity funds.

At Citi, we offer a comprehensive portfolio of value-added services, including:

  • Safekeeping of private equity assets as required to be held by a qualified custodian
  • Robust reporting tools for managers via our proprietary Internet portal CitiDirect for Securities
  • Quarterly statement fulfillment to investors and interested parties
  • Custody of cash balances supporting funds’ processing needs
  • Operational integration with Citi Fund Administration Services