Kinetic Partners is a leading provider of tailored consulting, advisory and assurance services to clients within the financial services industry. Since it was established in 2005, Kinetic has assembled a multidisciplinary team of industry experts drawn from regulators, financial institutions and asset management firms, as well as a host of other professional services firms. It currently services over 1,200 clients across eight global offices.
To deal with the shifting regulatory sands within financial services, and to reflect the organic growth of the business, Kinetic Partners has undergone a restructuring process. It recently appointed founding member, Julian Korek, as CEO, in addition to a new management structure. Andrew Shrimpton (pictured) heads up the Regulatory Compliance practice, overseeing the US, the UK and Hong Kong.
“We’ve grown year-on-year. Our revenues increased by 25 per cent in 2012. Our client base has grown both in Europe and the US. We’ve gone from 120 hedge fund managers in the UK to 150 and increased our US client base from 60 to 90. These include start-ups as well as established managers, who have switched from other consultants that don’t have a US footprint and US regulatory expertise.
“We have a number of hedge fund managers we support globally in New York, London and Hong Kong. We’re the only compliance firm that can provide that level of global support,” says Shrimpton.
This is crucial given that most of the major regulation affecting hedge funds is coming out of Europe and the US. Last year, US managers were required to register with the SEC, while at the end of the year CFTC registration was introduced.
Adds Shrimpton: “SEC registration coming into play was important for us last year. The SEC intend to visit four times as many managers as they used to so managers need to be properly prepared. Interestingly, what we are finding is that some firms are deciding to move from full registration to ERA (Exempt Reporting Advisers). As long as you don’t have a managed account of a US investor, you can manage an unlimited amount of assets here in the UK.”
Shrimpton says that the big focus for the firm this year is the AIFMD. He says that for those managers who raise money in Europe, they remain uncertain as to what the status of marketing is going to be in the summer.
“They will need to become AIFMD-compliant quite quickly so they can have certainty about their ability to market to European investors. For those managers who mainly raise money in the US, Middle East and Asia they’re going to be more relaxed and take advantage of the grace period. They’ll get AIFM authorisation next year.”
What also remains unclear is whether private placement regimes will remain open for non-European managers. Countries like Germany, for example, want to close the regime, whereas other Member States like the UK plan to give managers a one-year grace period.
“The key issue for managers this year is deciding what their marketing strategy is and whether they need to become AIFMD-compliant as early as possible or leave it till next year.”
On winning the hedgeweek award, Shrimpton comments: “We are over the moon to win this award and keep one step ahead of our competitors. Particularly in a year when the AIFM Directive is being implemented, and regulation is front of mind for the financial services industry.”