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Our client was a successful prop trader at a top tier investment bank. Together with an associate of his, they set up a UK Fund Management company with the intention to launch a series of Cayman Island equity-centric hedge funds. Our client approached us to provide a flexible pre-launch Chief Operating Officer resource and 'run' the launch program. At the point of mandate, the client's lawyers were engaged to draft the fund formation documents but no further fund infrastructure or operational decisions had been taken.
Our client wanted us to provide the necessary guidance through the launch process. The detailed deliverables included:
Assist the vendor selection process - recommendations of suitable vendors, service providers and counterparties - appropriate for the client's strategy, volume and growth plans
Manage the integration of the various service providers and counterparties to meet the go-live date
Supervise the FCA authorisation process. Formally map external Service Level Agreements (SLAs) against internal Operating Level Agreements (OLAs)
Design and document the operational processes and act as interim COO up to go-live; liaise and advise on all non-trading decisions including compliance, technology, audit, trade operations and office space
Post go-live, recruit and handover to a competent full-time COO
We developed a fund launch 'road map', introduced vendors, supplied the client with a SWOT analysis, drafted SLAs and internal procedure documentation, interviewed staff and delivered continuous project management. Training workshops and process validation was provided on a regular basis.
The end-to-end interim COO service was provided on a flexible and cost-effective basis. It was essential to have a consultant with the relevant fund launch, industry consulting and operational experience who understood the numerous components and how these fitted together, yet could work at the technical and detailed level needed to launch the fund and deliver the associated processes and documentation to meet the client's requirements. The client was not locked in to a permanent resource whose skill set did not match the near-term requirements.
Outcome and Business Benefit
The project was completed successfully and within budget. The fund was able to hire a permanent COO - an operator without fund launch experience but a practitioner well-versed in the day-to-day running of a small but growing fund.