Preface

The modern fund manager does not have it easy.

Quite apart from the everyday pressures of investing, and on top of whatever challenges the current dynamics of the market throw up, fund managers must contend with a regulatory environment that continues to evolve, sometimes in extremely unpredictable and unhelpful ways. They must adapt to the changing expectations of investors and other stakeholders, and they need to ensure that they are managing the threats and opportunities offered by new technologies and other innovations. All of this costs money.

Having built a strong investment reputation, having raised and returned significant capital to investors, a fund manager may well survey the business it has built and wonder if it really was the business it set out to build in the first place. Yes, there is a strong investment team and the services teams necessary to support it. But was the intention to build an accounting and administration practice? Does the benefit of holding these services in-house properly compensate for the costs and liabilities? Could it be a distraction from the core role of investing?

Sometimes, in light of the pecuniary and operational challenges facing the modern fund manager, the best option is to lift out the embedded operational team (or a portion thereof) and transfer it to a specialist service provider.

At IQ-EQ, we have been privileged to support a number of clients in lifting out a portion of their team and supporting the fund manager’s operations.

“Lift-outs” are increasing in popularity but are not always well understood. As a result, we have asked specialist consultancy, Wagtails Private Markets, to collaborate on this whitepaper. It lays out the moving parts of a lift-out and the best practices that can help managers move forward with confidence, once they have made the decision to proceed.

We would like to thank the IQ-EQ clients and staff that took the time to share their technical and commercial expertise (as well as their live project experience) with the team. We would also like to thank Wagtails Private Markets for their brilliant support in producing this guide. We hope that fund managers, and others, will find it useful as they tackle the operational challenges of managing their funds in an efficient and profitable way.

Justin Partington Global Head of Fund and Asset Managers

Neil Synnott, Chief Commercial Officer, Asia

About Wagtails Private Markets

Founded by industry veteran Matt Craig-Greene, a frequent speaker on LP, GP and service provider communications and relationships, Wagtails is a strategic consulting and advisory firm dedicated to the private markets. We employ a research-led approach to bring clarity and understanding to a sector that has sometimes suffered from a tendency to walk more in the shadows than the light.

Wagtails helps fund managers and service providers understand how they are perceived and how to better tell their story, in print, in person and through the full array of rich and digital media.

wagtails.co

This document is provided for information purposes only and does not constitute legal, tax, investment, regulatory, accounting or other professional advice. For more information on the legal and regulatory status of IQ-EQ companies please visit www.iqeq.com/legal-and-compliance.