Capital Markets Case Study: Heard Capital
A comprehensive due diligence assessment, coupled with pragmatic solutions, better positions Heard Capital to attract institutional client capital.
Date : December 18, 2014
Heard Capital, LLC is a global fundamental equity long/short investment management firm headquartered in Chicago, Illinois. It seeks to generate superior returns while preserving capital in adverse market conditions
A fresh, independent view of operations
Heard Capital has a three-year track record for strong performance but has struggled to raise assets given its size. The firm’s ranking among Bloomberg’s “Top 20 Emerging Managers” based on performance, however, has intrigued potential investors.

The firm was interested in understanding how to differentiate its processes and make itself more attractive to institutional investors. Heard Capital turned to West Monroe Partners, which offered deep capital markets experience, including a Due Diligence Readiness AssessmentTM that allowed the firm to:
  • Position itself better relative to emerging managers for institutional client assets
  • Understand the value drivers beyond good performance, low fees, and access to liquidity
  • Gain access to a network of investment consultants and other institutional money allocators
  • Develop and grow its investment process and organization in line with the new strategic plan
A proven approach
West Monroe Partners’ Due Diligence Readiness Assessment helps hedge fund managers prepare for institutional due diligence by investment consultants, plan sponsors, and other allocators of money. Through targeted document review, structured interviews, and observations, our team worked with Heard Capital to identify aspects of its business that could be of concern to potential investors and prevent the fund from realizing its growth goals.

A comprehensive view of Heard Capital

West Monroe’s assessment focused on five factors that allocators of institutional capital have determined to be of most importance when evaluating an investment manager:
  • Business—ownership structure, alignment of interest, diversified client base
  • Staff—key man, separation of duties, retention, boards, advisors
  • Investment management—process, monitoring, portfolio construction, transparency
  • Risk—process, reporting, systems, transparency
  • Operations—service providers, valuation, cash management, continuity

West Monroe Partners worked with Heard Capital to develop a road map of prioritized initiatives that will enable it to become better positioned for growth. The assessment uncovered some quick wins, while other initiatives will become achievable as assets continue to grow. The road map will be valuable for Heard Capital for years to come as the firm progresses toward its goals.

Ready when investors come knocking
Being ready for due diligence is always better than improving after an opportunity has passed. By undertaking a proactive assessment with West Monroe Partners, Heard Capital now has a road map for its business that is achievable and supports both its growth expectations and the realities of its business environment.

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