Rotation Capital uses Professional Services and
The Archiving Platform™ from Smarsh to save time and money
Marshall Terry serves as the Chief Operating Officer, Chief Compliance Officer, and Managing Director of Rotation Capital Management, L.P. (“Rotation Capital”), a New York-based alternative asset management firm. Rotation Capital advises private investment funds that cater to investors, including corporate and public pension plans, foundations, endowments, banks, insurance companies, family offices, and high-net-worth individuals.
Terry is responsible for creating a strong culture of compliance for Rotation Capital. As Chief Compliance Officer, he must demonstrate to regulators that the firm archives and supervises its emails and other electronic communications including LinkedIn, Twitter, and Bloomberg Instant Messaging. Rather than building an in-house compliance system, Terry realized it was more efficient and cost effective to partner with a cloud-based archiving provider to put an effective supervision solution in place.
Benefits that go Beyond Cost Savings
“This isn’t just about cost savings—it’s also about maximizing time and figuring out how to functionally filter through more than one million messages per quarter,” said Terry. “It’s unrealistic to hire someone to sit in my office and build an email filter system, whatever the cost may be. My job as COO is to figure out where we need to strengthen the firm’s systems. I’m not a technologist. I know I have a responsibility to archive and perform electronic communications surveillance. The bottom line was that I had to find the best partner.”
After reviewing archiving and compliance solutions from several vendors, Terry selected The Archiving Platform from Smarsh. He describes the comprehensive archiving platform as his “needle-in-a-haystack finder,” which allows him to show regulators and investors how his firm supervises emails and other electronic communications, and quickly identify potential risk in messages.
Smarsh Professional Services Provide Additional Compliance Support
Terry stated that he was very impressed by the extensive support he receives from the team at Smarsh. In addition to The Archiving Platform, Smarsh offers supervision and compliance consulting from its dedicated Professional Services team.
Terry said this relationship is more of a true partnership compared to his experience with an archiving provider his firm used previously. “I call this type of relationship with Smarsh ‘co-sourcing,’ not outsourcing,” he said. “We discussed what was important to Rotation Capital from a compliance perspective, but I was also able to leverage Smarsh best practices. Smarsh didn’t dictate the end result to me. I can look at someone and say, ‘I built the policy rules with the team at Smarsh; they’re part of my team.’”
This partnership is critical for Terry. He credits Smarsh with being more proactive “and responsive in its customer service than his previous vendor, which he said
didn’t seem to recognize the unique compliance challenges faced by his small hedge fund.
“When I look for partners, I want the best product. I also want people who understand what I’m doing, what my needs are, and can actively help me get where I need to go,” he said. “Smarsh fit that criteria.”
“I also want people who understand what I’m doing, what my needs are, and can actively help me get where I need to go. Smarsh fit that criteria.”
COO, CCO, & Managing Director,
Rotation Capital Management, L.P.
Automated Policies Help Rotation Capital Quickly Identify Potential Risk in Communications
Terry also worked closely with Smarsh Professional Services to create strong, automated policies using keywords and phrases that are designed to quickly identify potential risk in the firm’s electronic communications.
“We constantly try to narrow down the population of messages that require review to those that actually present potential risk,” said Terry.
For example, in the first quarter of 2016, Rotation Capital received more than one million messages that needed to be archived and reviewed. Terry knew it was virtually impossible to manually wade through so many messages. Based on the policies he created with Smarsh, The Archiving Platform then automatically whittled that to a much more manageable 1,749 emails that required close attention and human review.
Today, The Archiving Platform reviews and auto-closes tens of thousands
of messages each week for Rotation Capital.
“At first, I thought I was going to perform monthly message reviews. However, after working more with the Smarsh Professional Services team,
I realized reviews could be done weekly because we’re now physically looking at a much smaller subset of messages.”
Now Terry can focus his time and energy on the most pressing items for review, rather than searching for risk in the wrong places. “I literally sat here today on my lunch break and review 100 emails during the hour. I actually feel comfortable that I looked at the ones that needed attention. I can say I methodically worked through them.”
The comprehensive, policy-based archiving platform ensures Terry can help keep his firm compliant. In turn, he has greater confidence in his interactions with investors and regulators.
“How do you look someone in the eye and say you’ve manually reviewed millions of emails and other types of content? It’s just not possible,” he said. “With Smarsh, I can honestly tell someone that every message is reviewed. I can also demonstrate that with audit trails and reports from The Archiving Platform.”