Leading Compliance at a Hedge Fund - Insights and Strategies

Rutherford’s Leadership Series is a series of interviews with key players within the compliance, legal, financial crime and cyber security sectors. These informal conversations will serve as an opportunity for compliance, legal and cyber professionals to get insights on the trending topics within their field.

For this next instalment in the series, we sat down with a top Head of Compliance in the financial services sector to discuss what the compliance culture looks like at a hedge fund.

Before we start digging into the subject of compliance culture at hedge funds, can you please let us know a little more about your background and what led you to a Head of Compliance role?

After law school, I did a few vacation placements with some law firms in London, spending a couple of weeks rotating between different departments, from commercial to employment. It's right after being on the job, doing those placements, that I realised I didn't want to only be doing employment law or corporate law for the rest of my career. I wasn't into the vocational side of the legal qualification, if you can say so.

That's how I started looking at company secretarial roles, and officially started my career at a Big 4 firm. I spent 18 months there, and this is where I was first exposed to the world of compliance.

I then changed industries, by moving to a pharmaceutical company which was going through a merger. I was put in a situation where my role was to get the merger over the line from a legal perspective. I was able to get fantastic exposure to senior management and be part of a very dynamic corporate environment.

After over three years, I thought it was probably time for me to move on. It was quite the intense in-house role, with long hours, and I was ready for a new professional challenge. I then made my move over to a big bank, now being responsible for the group's position reporting requirements at a global level. It was more of a pure compliance role, so to speak.

After a few years in such a big corporation, I came to the realisation that my interests and profile were probably more suited to a smaller environment, where I would get more generous compliance experience. This led me to occupying different compliance positions in hedge funds.

How was the adaptation, going from a big bank to a smaller team at a hedge fund?

The culture was different in many ways. Hedge funds tend to be a lot smaller in terms of corporate environments, and usually come with a quite flat structure. This means you get a very hands-on experience, especially from a compliance perspective. For instance, I had to entirely build the control and compliance function at my first role in a hedge fund - this was a great learning experience.

From a dynamics point of view, I personally found it easier to get things done. Like I said, structures are quite flat at hedge funds and teams are smaller. I could therefore easily walk over to someone in, let's say, the IT department, and ask them if we could sit down to have a conversation about something specific. The next day, we would have that meeting, and months later, we could have a new system in place. It was always fairly quick to get stuff done. At a big bank, the same project for instance could have taken 12 to 18 months to accomplish.

More than ever, businesses are expressing the importance of culture fit when looking to hire a new team member. Based on your experience with hedge funds, what would culture fit mean for one of these firms?

Because of their usual smaller size and their dynamic environment, I believe hedge funds tend to employ people who are forward thinkers, who can think laterally, and most importantly, who can think about the bigger picture.

I also think you need certain key traits to work at a hedge fund. If you like starting from scratch, starting with a blank piece of paper, then this environment might be your best fit. That's what happened to me when I joined my first hedge fund: I was able to get involved in any aspect of compliance and legal that I wanted to. From day one, I sat on the trading floor and got my hands dirty.