“An investment in knowledge always pays the best interest” – Benjamin Franklin.
The landscape of outsourced ‘Platform’ solutions for investment management has grown at pace in the last ten years and is becoming ever more populous and diverse. This is a huge positive for the broader industry but leaves a bewildering array of offerings and definitions. For investment managers, or investors, looking for a partner to scale or restructure their existing business, or launch a new venture, how do you navigate the myriad of platform offerings?
The growth in the platform solutions landscape has led to the broader definition of what a platform is encompassing a myriad of functions, thereby baffling many. The market demand for offboarding noncritical functions is the underlying factor in finding such a diverse spectrum of solutions. Historically, all non-investment management functions were predominantly established in-house, with investment management groups building their teams accordingly. However, as technology has evolved and the regulatory considerations increased, best practices (and rational) have evolved to consider that certain functions can be serviced robustly by independent third parties. Indeed, investor expectations are such that their due diligence process focuses on the process of oversight of third-party services as opposed to why a third party has been engaged.
This brings us back to the question of how to resolve what platform is appropriate for your requirements. AIMA’s Guide to Sound Practices for Platforms (AIMA, 2020) has categorized the platform sector as ‘Regulatory Hosting Platforms’ and ‘Product and Distribution Platforms’. While this is a valuable reference point, AIMA recognizes that there are hybrid-platforms, which have characteristics of both, as is the case for Quay Partners.
As often as not, our conversation with clients starts with a review of what talent both parties bring to the table. We are always looking for interesting opportunities to partner with, but a credible opportunity requires a cultural fit on both sides. A platform provider will be your immediate work family and, as per an in-house solution, will have touch points with service providers, as well as investors. Therefore, platforms and clients are both all-in on building a successful relationship that will last the distance and evolve over the years.
To assist those looking to navigate the platform landscape, we have undertaken a detailed market analysis, clearly defining the various offerings, functions, and jurisdictional coverage. It assists those we are talking to determine their priorities and clearly establishes where Quay Partners sits within this evolving landscape.
If we can help you to see the bigger picture, please get in touch.
To learn how Quay Partners can guide your business to success…www.quaypartners.com
Quay Partners Group delivers bespoke investment management solutions to independent hedge fund managers and family offices.
Zoe Condon, the Head of Business Development, with over 20 years’ experience in the hedge fund sector.
22nd April 2021