What should the banking model look like for VC, PE and hedge fund accounts?

- April 4, 2023

John D Rosanelli
Unites States Advisor to DMS Bank & Trust Ltd.

Following the recent turmoil in the banking sector during the last month, the focus for the alternative investment industry has been to ensure that their current banking arrangements are safe and secure. Many managers have been looking to diversify their banking relationships to avoid overreliance on a single institution and focus has increased on the importance of robust risk management and compliance measures to mitigate potential risks and ensure continuity of operations.

As an institutional, regulated banking provider, DMS Bank & Trust (DMS Bank) offers banking and custodial solutions to hedge funds, private equity funds, venture capital funds, investment managers and family offices within the alternative investment industry.

As a regulated trust bank, DMS Bank holds its client funds in trust with Bank of New York Mellon* on deposit or in cash equivalent assets. DMS Bank also offers secure custody and settlement services to allow clients to settle trades quickly and efficiently. Client securities are held on trust with our sub-custodian State Street Bank and Trust Company**. None of our client assets are held on our balance sheet, pledged or rehypothecated, thus reducing all liquidity and duration risk that is of particular concern for the alternative asset management industry. DMS Bank is subject to rigorous regulatory oversight and is required to comply with a wide range of laws and regulations providing a high level of security and assurance to managers and their investors. Furthermore, DMS Bank mitigates AML/KYC risk by utilising comprehensive systems and controls developed to exceed the requirements of the global regulatory architecture and industry best practices. The DMS Bank approach to client acceptance is risk based and employs technologies to minimise risk to both clients and DMS Bank.

DMS Bank’s focus is to assist clients within the alternative investment industry, built upon:

  • Institutional trust accounts
  • Custody solutions
  • Trust services
  • Fund-of-funds custody
  • Transaction and payment solutions
  • Foreign exchange
  • Trade execution
  • Paying agency
  • Cash management and escrow services.

DMS Bank plays a key role in supporting the growth and development of the alternative investment industry and looks forward to serving you.

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*The Bank of New York Mellon long term debt is currently rated AA- by Moody’s.
** State Street Bank and Trust Company, more commonly known as State Street Global Services is a subsidiary of State Street Corporation and currently has a long term debt rating of Aa1 by Moody’s.