The services of several entities are normally used in managing a fund, including, in particular, the manager, administrator and depositary. The optionally adjustable parameters of the fund are taken into account in their practical activities.
Fund Management Structure
Fund Management (Manager, Administrator)
The fund is managed by professional entities to the extent of their assigned roles (both roles can be concurrently carried out by a single entity):
- manager – manages investments and risks as well as related activities
- administrator – carries out administrative and professional tasks
The most frequent arrangements include fund management and administration by an investment company, or management by the fund internally (what is known as a self-managed fund) with administration by an investment company.
The role of the depositary is to take care of the fund assets and carry out the related checks, which primarily include recording and verifying financial transactions, issuing and buy-back of securities, determining the value of securities, etc. The depositary’s activities are governed by a deposit contract, in the interest of the fund and its investors. When carrying out this service, the depositary works closely with the fund manager and administrator.
An entity that has made the business decision to establish the fund and whose name will be borne by the fund. The promoter provides the fund with a manager, administrator and depositary to manage the fund and is allowed to change these.
Fund Management Practically
The fund statutes constitute the fundamental document governing the existence and activities of the fund and are intended for investors and entities managing the fund and carrying out related activities. Given the nature of qualified investor funds, the statutes of these funds are not usually published.
The essential information included in the fund statutes include the identification of the fund and its manager, administrator, depositary and other entities, the investment focus and policy of the fund, the financial management rules of the fund, information on securities issued by the fund, etc.
Financial Performance Audit
As part of the requirement for transparent financial management of the fund, its financial statements and annual reports are subject to a mandatory audit by an independent auditor, reported to the Czech National Bank and made available to the fund investors.
Asset Monitoring and Safekeeping
The safekeeping of assets (and asset checks, where the nature of the assets makes physical safekeeping impossible) and monitoring them are carried out by the fund depositary on an ongoing basis.
The investment fund’s assets and debts arising from its investment activities are valued at fair value according to International Accounting Standards.
Financial Indicator Reporting
The financial indicators of the fund are reported to the Czech National Bank and made available to the fund investors within the defined deadlines.
In addition to equity from investors, QIFs can also use liabilities for financing, i.e. they can receive credits and loans and issue bonds.
Would you like to learn more?Contact us