NEW YORK, NY / ACCESSWIRE / December 18, 2017 / Jerry Lees, of Linear Investments, has been involved in the success of many financial and technological businesses over the years. He started his career at Lloyds Bank in 1995 as a trainee graduate, acquiring banking experience in commercial operations. Over the next decade, he picked up enough experience in computer systems, project planning, and management of technical and sales teams to start his own company.
Northgate Computer Services PLC was a financial systems software house and he built it up into a leading FinTech company. Lees was also part of the team that founded Liberty (now Clearstream), building it from a concept into the first global electronic order routing and trading business. He was also Global Head of Alternative Execution at Credit Agricole Cheuvreux and Partner for over a decade and Head of Global Operations & Marketing for Quotron International (Citibank) for many years.
Lees has been Chairman of Linear Investments since 2013. This company was set up to incubate and nurture start-up hedge funds, brokers, and corporate finance houses and it continues to do this very successfully.
At the Alt Credit Intelligence European Awards on November 2, 2017, in London, Linear Investments won "Best Prime Broker - Credit Strategies." These awards are given to innovative hedge fund service providers that have provided exceptional service to their customers. Linear Investments not only won this award but was shortlisted for five other awards too.
Jerry Lees offers some insight into what it takes for new businesses to succeed in today's economic climate. He has useful advice for those who are trying to establish a new hedge fund. He believes that starting a new hedge fund is difficult but not impossible. Some of the difficulties that have to be faced are the current wariness of investors, growing regulatory burdens, increased operational costs, and lower fee expectations.
In the light of these difficulties, he stresses the importance of having a core value proposition, a good marketing strategy, and an audited track record. Building up a good track record is essential to attract potential investors and he feels that outsourcing is extremely important in order to do this successfully. The competition between emerging hedge fund managers trying to find seed capital is fierce. Outsourcing to those who have already developed successful solutions can offer a competitive edge at a time when it's really needed.
He says that a small team will find it almost impossible to handle all the aspects of setting up and running a new hedge fund. With all the regulatory burdens, it's much better to outsource regulatory setting up and reporting to those who already know how to do this successfully. The same applies to risk management, operational procedures, and managing technology. If compliance is outsourced, it's possible to become an appointed representative (AR) and start establishing a credible track record while waiting for FCA certification which can take a long time.
Lees believes that a key element to success is finding in-house seeder fund capacity and using a capital introduction team. Large prime brokers are often not able to find seed capital for new hedge funds, and may just offer false hope. A capital introduction team will work on the basis of results and already understand what investors want. Such a team is expensive, so outsourcing is vital.
By using a specialist prime broker, small hedge funds have access to an integrated platform solution, bringing together expertise, skills, and solutions all in one place. Using such a platform can significantly reduce startup costs and operational expenses.
This can make all the difference at a time when small funds are struggling to gain access to global prime brokers. As a result of reform measures taken by the Basel Committee on Banking Supervision, many brokers are finding they have to drop smaller clients who are just not profitable enough when they're trying to shore up their balance sheets.
Central to the services of a prime broker are custody of assets, access to financial and securities lending, execution of orders and portfolio reporting. A boutique prime broker, like Linear Investments, has a platform with extensive offerings that help with the successful establishment and growth of new hedge funds.
SOURCE: Linear Investments