Articles By Topic
By Topic: Outsourcing
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From Vol. 4 No.35 (Oct. 6, 2011)
Dechert Adds Vivian A. Maese as Head of Its Global Outsourcing and Offshoring Practice
On October 4, 2011, Dechert announced the addition of Vivian A. Maese as a partner in the firm’s Intellectual Property Practice, and head of its global Outsourcing and Offshoring Practice. See “Primary Legal and Practical Considerations for Hedge Fund Managers Looking to Outsource Their Operational Functions,” The Hedge Fund Law Report, Vol. 4, No. 33 (Sep. 22, 2011).
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From Vol. 4 No.33 (Sep. 22, 2011)
Primary Legal and Practical Considerations for Hedge Fund Managers Looking to Outsource Their Operational Functions
In September 2011, financial report publisher ClearPath Analysis released a report entitled “Fund Outsourcing: Assessing the Critical Issues and Considerations When Outsourcing Operational Functions as a Fund Manager” (Report). The Report is a compilation of interviews, roundtables and white papers designed to guide fund managers through the outsourcing process. This article summarizes the most important topics discussed in the Report including: (1) whether or not to outsource at all; (2) how to select a service provider (including how to think about track record, portfolio of clients and size); (3) the relevant legal and regulatory frameworks, including considerations under the AIFMD; and (4) how to properly manage and monitor the service provider. For a further discussion of best practices related to outsourcing, see “BNY Mellon’s Pershing Unit Releases White Paper Detailing Best Practices for Hedge Fund Outsourcing Solutions,” The Hedge Fund Law Report, Vol. 2, No. 42 (Oct. 21, 2009).
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From Vol. 2 No.42 (Oct. 21, 2009)
BNY Mellon’s Pershing Unit Releases White Paper Detailing Best Practices for Hedge Fund Outsourcing Solutions
As the global economy struggles to find stability in today’s volatile marketplace, the hedge fund industry faces new challenges after years of unprecedented growth. According to the white paper, “Fueling Growth: Outsourcing Solutions for Hedge Funds,” published by Pershing LLC, a BNY Mellon company, and Aite Group LLC, this growth has created an entire industry of service providers dedicated to fulfilling hedge funds’ “outsourcing” needs. The industry includes service providers such as prime brokers, fund administrators and information technology companies. However, at the same time, the recent increase in client redemption requests has threatened the viability of even the most well-managed hedge funds. As a result, while hedge funds struggle to recover from heavy losses and fund managers reassess their overall investment strategies, the white paper predicts that the need for outsourcing support may increase within the hedge fund community. In response, the white paper provides managers with a list of best practices for outsourcing and a systematic framework for helping them select and manage relationships effectively with third-party outsourcing solution providers. This article summarizes the findings of the white paper, including the many factors hedge funds should consider when establishing an outsourced vendor relationship, such as cost, evaluating disparate information, balancing internal resources, prioritizing short and long-term business goals and establishing appropriate relationship metrics.
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