DTCC Adds Transfer Agency to Alternative Platform
July 12, 2010
Depository Trust & Clearing Corp. has added a San Rafel, Calif., transfer agency to its Alternative Investment Products platform for processing transactions in alternative investments.
Phoenix Transfer says it will begin testing the Depository Trust & Clearing Corp.’s Alternative Investment Products platform. The transfer agent for income funds and non-traded real-estate investment trusts will send the AIP platform data on non-traded REITS and limited partnerships giving registered representatives and financial advisers the ability to seamlessly connect with manufacturers of the products.
“This [partnership with DTCC] will open the doors for our clients to access tens of thousands of reps and advisers,” says Phil Owen, vice president of operations for Phoenix Transfer in San Rafael, Calif. in a statement issued by DTCC.
“Participation in DTCC’s AIP platform is consistent with Phoenix American’s commitment to provide its clients with maximum efficiency, reliability and flexibility.”
The DTCC confirms that Phoenix Transfer is not the first transfer agent to sign onto AIP; Bank of New York Mellon did so in 2008. The umbrella organization for clearance and settlement of U.S. securities transactions in New York referred further inquiries to Phoenix Transfer. That firm did not return calls seeking comment on Monday.
Two years after it was launched, the system for automating the exchange of all trade-related account information is beginning to eliminate the wads of hardcopy, fax, email, phone calls and spreadsheets being exchanged between distributors and sponsors of alternative products as well as their transfer agents.
The AIP platform processes investments in hedge funds, funds of funds, private equity funds, non-traded REITs and limited partnerships. The platform is being pilot-tested, for instance, by firms such as broker-dealer Charles Schwab Corp. technology supplier and brokerage firm Pershing, which is a subsidiary of Bank of New York Mellon.
Users can scan the necessary paperwork and signatures required by each fund. The success of the AIP platform will depend on how well it is embraced by product sponsors, according to DTCC. To use the AIP platform, offered through the DTCC’s National Securities Clearing Corporation, hedge funds and funds of hedge funds will have to become members of the clearinghouse although it will not guarantee the settlement of their transactions.
Driven by investors’ desire for portfolio diversification, the market for alternative investments has grown significantly since 2000. Hedge fund assets alone have grown to an estimated $2.7 trillion while the size of the non-traded REITs has almost tripled over the past five years to reach $438 trillion.
