The client, their challenge
Our client is a major US private equity firm with over $160bn in assets under management (AUM). Historically the firm was solely based in the US, but they wished to explore the possibility of global expansion. The first part of this was hiring a team in the UK to source deals, and potentially to market to UK investors. The new enterprise was planned to be small, at least initially, with only a handful of employees. It was to act as a test bed for the global expansion strategy.
The firm wanted the team to have the ability to conduct regulated activity quickly, but did not want to build up a fully resourced internal compliance team in the short term. Regulatory hosting was the obvious way to support the business whilst it got up and running and build internal capability.
Our solution
At the very outset IQ-EQ assisted the firm with UK incorporation and company secretariat services. Following that it was able to provide payroll, accounting and board support services.
Once established, the firm became an appointed representative (AR) of Sapia Partners (an FCA regulated firm, part of IQ-EQ). In this way it was ready to conduct regulated activities quickly and could rely on the tried and tested compliance infrastructure provided by IQ-EQ to give surety that all regulatory requirements were being taken care of.
We provided the firm with a compliance manual and relevant policies and procedures. We also ensured their activities were properly monitored in line with the requirements of the AR regime. The firm’s returns were taken care of, and the firm was able to take comfort that they were hosted by a principal firm with sufficient resources, both financial and non-financial. In conducting our monitoring, we liaised with the compliance function of the firm’s HQ in the US to ensure transparency and good flow of information.
The results
The firm remained as an appointed representative for 2.5 years. Once their business was thriving and relatively mature, they decided to seek direct authorisation with the FCA. They submitted their application, which was approved quickly, and the firm became authorised in their own right in January 2025 to conduct introducer / arranger activities. We were able to manage the process such that there was a seamless transition between being an AR and being directly regulated. We remain on hand should the firm require further support.
