A small team cannot expect to cope with all the demands of setting up and running a new hedge fund, especially with increasing regulatory burdens. Regulatory set-up and reporting is one area that can be outsourced. Other areas of outsourcing may be compliance and risk management, IT and operational risk, legal and structure and even office and facility set-up. By outsourcing many processes to a platform solution, you will be able to demonstrate that your fund complies with all the necessary regulations, has satisfactory risk controls and the operational technology is in place.
Investors feel confident when they know that a third-party intermediary platform is looking after their investments. The business risks are limited and controlled, making the institutional investment in a fund possible. Investors know that the platform won’t risk its other investor relationships when one small fund defaults.
If you outsource compliance, you can become an appointed representative (AR) within a few weeks and establish a regulated track record while waiting for the FCA. If you outsource IT and office infrastructure to an organization that is compliant with AIFMD and MiFID 11 outsource trading, you will minimize execution costs and save money and time on trading costs that affect your bottom line.
