In the high-stakes arena of hedge fund management, staying ahead of the curve is essential. This case study sheds light on how Source Advisors helped a mid-sized, seasoned hedge fund unearth untapped value through R&D tax credits.
Founded over 15 years ago, this mid-sized hedge fund manages around $5 billion in assets primarily for pensions, endowments, and foundations. With strategies that span various asset classes globally, the company has positioned itself as a major player in the financial industry.
In a field that demands quick decision-making and high-risk management capabilities, the hedge fund had to develop its own proprietary software for trading and risk management. These sophisticated systems required continuous R&D to adapt to volatile market conditions, meet strict compliance requirements, and offer a competitive edge.
The firm’s software development activities involved extensive research, testing, and collaboration among traders, developers, and risk managers. Projects typically ranged from developing advanced trading algorithms to building comprehensive risk management systems. The R&D was an ongoing, iterative process aimed at optimizing the firm’s trading performance and risk management capabilities.
Before the engagement, Source Advisors conducted an initial feasibility study to establish a framework for potential tax credits. This was a decisive factor for the hedge fund in choosing Source Advisors over competitors.
Our team scrutinized the specifics of the hedge fund's software development projects, considering factors like complexity, required skills, and associated costs.
We reviewed various types of expenses, including labor, third-party software integrations, and other overhead costs. Based on this analysis, we calculated the potential R&D tax credits the firm could claim.
We ensured that the identified R&D activities met federal and state tax laws, including rigorous checks on supporting documentation, to ensure they were audit-proof.
Don’t let potential R&D tax credits go unclaimed. Your next innovation might just be waiting for that financial push.
Contact Source Advisors today to explore how we can unlock tax advantages for your company.