Prime broker and technology provider Merlin Securities recently published a white paper entitled “The Importance of Business Process Maturity and Automation in Running a Hedge Fund.” Broadly, the white paper does four things. First, it identifies business process automation as fundamental to various aspects of the hedge fund management business, including growth (in assets, strategies, personnel, etc.), marketing and avoidance of major mistakes. Second, it provides a framework for determining a manager’s level of business process automation. Third, it offers a method for assessing whether a manager’s level of business process automation is too much, too little or just right in light of where the manager is in its lifecycle. And fourth, for managers with too little or too much automation in light of their stage of growth, the white paper examines the three primary strategies for getting to what it terms the “automation sweet spot.” The fundamental insights of the white paper are that the hedge fund management business is becoming more “institutional,” and that business process automation is an important element of institutionalization. It is hard to say whether managers are becoming more institutional because more assets are coming from institutional investors (as opposed to, for example, high net worth individuals), or whether institutional investors are becoming more open to investments in hedge funds because managers are becoming more institutional. The answer is probably a bit of both, but for practical purposes, the answer is moot: managers that seek assets from major institutional investors have to “act institutional.” What this Merlin white paper adds to the discussion is a way of thinking about what it means to act institutional from a business process perspective. This white paper is the latest in a series of white papers from Merlin Securities, and we at the Hedge Fund Law Report have reported on prior Merlin white papers. See, e.g., “Eight Refinements of the Traditional ‘2 and 20’ Hedge Fund Fee Structure That Can Powerfully Impact Manager Compensation and Investor Returns,” Hedge Fund Law Report, Vol. 4, No. 17 (May 20, 2011) (discussing, among other things, the Merlin white paper entitled “The Business of Running a Hedge Fund: Best Practices for Getting to the ‘Green Zone’”); and “Prime Broker Merlin Securities Develops Spectrum of Hedge Fund Investors; Event Hosted by Accounting Firm Marcum LLP Examines Marketing Implications of the Merlin Spectrum,” Hedge Fund Law Report, Vol. 3, No. 39 (Oct. 8. 2010) (discussing, among other things, the Merlin white paper entitled “The Spectrum of Hedge Fund Investors and a Roadmap to Effective Marketing”).