Compliance firm Robert Quinn Consulting and family office Capricorn Capital Group have joined forces to create a discretionary management regulatory hosting platform, Capricorn Regulatory Hosting, with offices in London, New York, and through Capricorn, Johannesburg and Hong Kong.
CFM founders Darryl Noik and Jonty Campion join Robert Quinn in the launch, aimed at sub-USD250 million investment management firms operating in the private equity, hedge fund, property fund or other alternative space who wish to launch their products speedily.
Regulatory approval through the usual channels could take more than six months, the new firm says, while on their platform, firms can be up and running within four to six weeks.
Quinn says: “The regulatory landscape in the UK has changed as the regulatory burden has increased. Each new round of rules makes it hard for smaller managers to get licensed so we are hosting a platform to make it easier to get to market quicker.”
Noik says: “Investment managers need compliance, operations and distribution and the cost of getting those people to do that is expensive.” He notes that pre-2008 having strong investment management was enough, while post 2008, the due diligence review by potential investors looks at the back office, risk management and compliance. “You need to get those things right and smaller managers can’t afford to do that,” he says.
The new platform has three firms onboarded already, with a fourth on its way, and is aiming to have 10 by next June. It is aiming to keep client numbers under 20 at any one time.
Noik says: “We think we have found a niche with a pragmatic perspective. Relationships are key and we need to have proper control and oversight of these managers. It’s an intense process in terms of responsibility because we become the investment manager but it’s important for high net worth investors.”
Quinn’s business is 12 years old with a staff of 15 and an office in New York and London, allowing American fund managers to open up in the UK within this shortened time frame of four to six weeks. Quinn says: “For smaller managers this offers an attractive way to market.”
Noik says: “As a potential investor who is going to a wealth manager, it gives a sense of comfort that there is a third party that is responsible for the compliance and regulation of the firm.”
The new platform provides firms with Appointed Representative Status, which allows firms to undertake investment management and marketing activity in the UK. CFM will grant clients the use of its FCA regulatory permissions under its supervision. The provision of regulatory cover will be subject to initial due diligence and ongoing oversight. Each client will receive compliance expertise, regulatory advice and documentation throughout the process.
The platform will also offer AIFM hosting services. CFM will be the AIFM to the client fund while delegating the portfolio management function to the client.
