TSA Pre-Signing Review
Quantify the manager exposure before signing.
Fixed-fee proposal in 48 hours. Senior team on day one. The first conversation is always free.
An asset management carve-out TSA carries adviser registration, trading systems, custody arrangements, fund accounting, performance attribution, and a compliance program that the SEC, FINRA, AIFMD, and FCA all read against a literal interpretation. The work sits inside the broader carve-out advisory framework with manager specific overlays that shape the data perimeter and the regulatory exit. The Newco does not get to start with a clean books and records cabinet. Five years of historical records have to travel with the adviser.
An asset management Newco needs an SEC registered investment adviser, a state registered adviser, or a relying adviser status depending on the assets under management and the client base. Form ADV Part 1, Part 2A, Part 2B, and Part 3 all need fresh filings under the new entity. Schedule R disclosures of relying advisers, Item 7 disclosures of financial industry affiliations, and the custody disclosures under Item 9 carry across with the same care they had under the seller's registration.
European managers under AIFMD or UCITS face a different process. Home state regulator approval, depository agreements, and management company passporting all need formal action. FCA, BaFin, AMF, and CSSF approvals can run six to twelve months. Cayman, BVI, and Delaware fund vehicles need investor notification and consent under the offering documents, side letters, and limited partnership agreements. The buyer that has not mapped the regulatory perimeter pre-signing is the buyer that explains a delayed close to limited partners.
The TSA bridges the gap between the legal close and the regulatory close. The seller continues to provide adviser services under sub-advisory or shared services arrangements until the Newco's registrations and approvals are in place. The TSA service catalog has to specify which entity holds the regulatory liability for every act during the bridge.
The order management system, the execution management system, the portfolio management system, and the compliance pre-trade screening engine sit at the centre of every trading day. Charles River, BlackRock Aladdin, SimCorp Dimension, Bloomberg AIM, FlexTrade, and Eze platforms all carry decades of configuration in tax lot accounting, mandate restrictions, broker rules, allocation algorithms, and compliance rule sets. The Newco needs continuous trading capability from Day One with every broker connection, every allocation rule, and every restriction in place.
The TSA typically keeps the seller hosting these platforms for an extended period. Migration to a fresh tenant or a different platform is the dominant driver of TSA duration in manager carve outs. Migration projects run six to twelve months and require a parallel trading window, a freeze period, and a series of cutover dress rehearsals before any client account moves to the new environment. The carve-out plan has to identify the destination, the broker matrix, and the budget envelope before the buyer agrees to a TSA length.
Broker, custodian, and prime broker connections all carry change of control notices. ISDA, GMRA, GMSLA, and futures clearing agreements all carry counterparty consents. The pattern overlaps with the broader carve-out vendor contract assignments playbook applied to a regulated counterparty class.
Daily NAV strikes for mutual funds, weekly NAV for some alternatives, and monthly NAV for private funds carry tight cutoff windows. The fund accountant, whether in house or at a third-party administrator like SS&C, Citco, State Street, BNY, or Northern Trust, produces the NAV from a chain of pricing feeds, corporate action processing, expense accruals, performance fee calculations, and accounting policies. The Newco needs an unbroken NAV cycle from Day One. A missed NAV is a board level event and an investor relations call no manager wants to make.
The administrator relationship carries change of control language. Some agreements assign with consent. Some require fresh contracts that take ninety days to negotiate, including operating memoranda for each fund. The fee schedule may reset to current market rates and increase costs by twenty to forty percent. The buyer that priced the carve-out without a fresh administrator quote underestimates Newco operating cost.
Performance attribution, GIPS composites, and the verification report all transfer with the firm. Composite definitions, dispersion calculations, and benchmark assignments have to remain consistent through the carve-out. A GIPS break across the carve-out date is the kind of footnote that institutional consultants flag in the next due diligence questionnaire.
A registered adviser operates under a written compliance program under Rule 206(4)-7. The chief compliance officer, the policies and procedures, the annual review, the code of ethics, personal trading pre-clearance, gifts and entertainment register, political contributions log, and the marketing compliance program all carry across with the firm. A Newco that runs the first month without a designated CCO, an approved policy set, and a functioning surveillance program is a Newco one examination away from a settlement.
Books and records under Rule 204-2 require retention for five years, the first two on site, with the form and substance prescribed. Electronic communications, trade blotters, allocation records, advertising files, code of ethics records, and the financial books all have to be available for SEC examination on demand. The carve-out plan has to confirm the records either travel to the Newco's systems or remain accessible under a TSA service line with documented chain of custody.
Filings, registrations, and notice obligations carry their own calendar. 13F, 13D, 13G, 13H, Form PF, Form CRS, blue sky filings, and state notice filings all need owner updates and timely refilings. The pattern overlaps with the broader Day One regulatory filings playbook.
Every investment management agreement, every subscription document, every side letter, and every relationship contract contains change of control language. Some assign automatically. Some require investor consent through a negative consent letter with a thirty day window. Some require affirmative reaffirmation. Institutional clients almost always require a formal manager re-due diligence pack that runs forty pages, an operational due diligence review, and a board approval on their side.
KYC and AML files for every investor, every beneficial owner, and every authorised signatory transfer with the relationship. The Newco accepts the existing files and runs a continuous monitoring program from Day One. Refresh cycles, ongoing screening, and adverse media monitoring continue on the same cadence. A Newco that loses an investor file in the transition is a Newco that has to refresh the relationship from scratch at the investor's pace.
CRM data, pipeline records, capital call history, and distribution history all travel with the client relationship. The Newco needs a clean investor master with audit trail to historical events. The transition plan has to specify the data takeover, the access rights, and the post-close access window. The plan should also reference the broader carve-out customer contract assignments playbook.
A clean asset management TSA exit closes four records. The Newco holds adviser registration in every jurisdiction it operates. The trading and accounting platforms run in the Newco's environment with a clean tie out to fund administrator records. The compliance program runs under the Newco's CCO with five years of records inside the Newco's perimeter. Client agreements, investor consents, and side letters all reflect the Newco as counterparty.
Open items, typically a small set of legacy trade breaks, outstanding regulatory inquiries, and pending administrator transitions, sit under a short post-close services agreement with a hard end date. The seller's cooperation on legacy items is documented. The Newco's takeover of forward responsibility is documented. An SEC routine examination or a state sweep during the post-close window deserves a coordinated response on both sides.
Specialist support across the asset management carve-out is part of the TSA Pre-Signing Review service when the buyer wants the regulatory exposure and platform migration budget quantified before signing. The work coordinates with the Newco's CCO, the chief investment officer, the CIO, and the seller's compliance and operations teams.
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Seven buyer-side moves to exit a Transition Services Agreement on time and below budget. The mark-up, the extension-fee curve, exit sequencing, and the 11-month calendar.
A representative $120M-revenue financial-services carve-out runs a Transition Services Agreement across eight functions while a regulator watches every cutover. The moves below cut the exit from an 18-month drift to an 11-month managed exit and remove $2.8M of mark-up and stranded cost — without missing a single supervisory deadline.
One tactic, one benchmark, or one pattern from a recent buyer-side engagement. Short. Signal heavy. Free.
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