The client, their challenge
Our client is an investment adviser that wished to raise a small private equity fund. To focus their attention on deal sourcing and marketing, the firm’s founders decided to appoint a regulatory host to take ownership of all compliance and regulatory matters.
Once they were ready to launch their first fund, they needed an alternative investment fund manager (AIFM) under the requirements of the Alternative Investment Fund Managers Directive (AIFMD). They decided to outsource the manager function to a specialist third party firm.
The client’s strategy is focused on investment into micro-cap companies in the UK and Ireland. Their target market is companies with an enterprise value of less than £10m.
Our solution
The firm first became an appointed representative (AR) of G10 Capital (an FCA regulated firm, part of IQ-EQ). Using this route, it was ready to conduct regulated activities quickly and the principals could focus on their key challenges of fund raising.
Once commitments were in place to launch Fund 1, IQ-EQ was appointed as third-party AIFM to the fund. We became responsible for the portfolio management and risk management of the fund and, importantly, managing the investment committee process. In addition, we ensure that all the regulatory aspects under AIFMD, such as Annex IV reporting and valuations, are taken care of.
A further service provided by IQ-EQ is investor KYC, i.e. performing relevant financial crime checks on all investors into the fund.
The results
Several years on, the firm is now ready to launch Fund 2, again with IQ-EQ acting as manager to the fund. We hope to continue to support the firm as its grows and its portfolio companies flourish.
Click here to find out more about our AR regulatory hosting services.
