Understanding the role of a private equity custodian

A custodian is an independent financial entity that acts as a third party to an investment agreement. Its role is to monitor and protect the assets and rights of investors, and to meet their needs in terms of services and fund management. It may also act as a mediator between the partners in an investment agreement.

A custodian may also be responsible for managing assets on behalf of investors, and may be in charge of administrative assistance, accounting and depositing funds. It may also assist in implementing the terms of the agreement and preparing and transmitting documents.

A custodian is responsible for verifying the legal obligations of investors and checking that they comply with the terms of the agreement. It is also responsible for providing information to investors on their commitments and for verifying the information provided by the partners to the agreement.

The depositary may also be responsible for managing disputes between the partners and for communicating information to the partners and third parties concerned. In some cases, the depositary's role may also include managing arbitration and out-of-court settlement procedures.