How to Review AIF Auditors, Custodians and Administrators
Understanding the Manager Decision
The auditor, custodian and administrator are independent checks on a manager's own reporting — the auditor verifies financial statements, the custodian holds fund assets, and the administrator maintains the official capital-account records investors ultimately rely on.
Reading Evidence and Attribution
Confirm the specific named firms serving in each role and their reputation and scale in the Indian fund-services market. A fund using a small, little-known auditor or administrator with limited independent standing provides materially weaker assurance than one using an established, recognised firm.
Where Manager Diligence Breaks
The common failure is not verifying these roles at all, assuming any SEBI-registered AIF automatically has adequate independent infrastructure. Regulatory registration does not guarantee the quality or independence of the specific service providers a manager has chosen.
Making the Selection Decision
Before committing, confirm: the specific named auditor, custodian and administrator; whether any of them have a prior relationship with the fund manager beyond this engagement that could compromise independence; and whether capital-account statements are issued directly by the administrator or merely relayed through the manager.
Independent service providers are only a genuine check if they are actually independent — verify the specific firms, not just that boxes are checked.
Key takeaways
- Auditor, custodian and administrator are independent checks on a manager's own reporting.
- Confirm the specific named firms and their standing — a small, little-known firm provides weaker assurance.
- SEBI registration does not guarantee the quality or independence of a manager's chosen service providers.
- Check whether capital-account statements come directly from the administrator, or are merely relayed by the manager.
More in Fund Manager Selection and Due Diligence
Continue with the other chapters in this module.
Related questions
What should an investor verify first?
The specific named auditor, custodian and administrator, and their standing in the Indian fund-services market.
Which documents matter most?
Capital-account statements issued directly by the administrator, not relayed through the manager.
What is the main downside to test?
Assuming SEBI registration alone guarantees adequate independent service-provider infrastructure.
How should the final decision be made?
Confirm none of the three service providers have a compromising prior relationship with the fund manager.
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