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What does Ring Fence mean in DD / PE consulting projects?

Hi, 

A senior associate mentioned that he was ring-fenced in a DD deal.

May I know what does ring-fencing/ed mean?

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Pedro
Coach
on Dec 06, 2021
Bain | EY-Parthenon | Former Principal | 1.5h session | 30% discount 1st session

It means that he is in a team that cannot be broken apart to staff other projects. DDs are very short projects, and as there is also some learning curve to understand DDs (and also to learn about the other team members strengths and weaknesses), consulting firms “ring-fence” the members of that team, meaning that they will work together project after project for a certain period of time (usually 6 months) before being allowed to work in other types of projects.

They are ring fenced because the staffing managers can't pull them out of that team to join other projects.

Ian
Coach
on Dec 06, 2021
Top US BCG / MBB Coach - 5,000 sessions |Tech, Platinion, Big 4 | 9/9 personal interviews passed | 95% candidate success

Hi there,

This means they're “reserved”. They are designated to only work on DD for that period of time. Often it's used for multiple months across multiple DD projects (Due Diligence).

Clara
Coach
on Dec 07, 2021
McKinsey | Awarded professor at Master in Management @ IE | MBA at MIT |+180 students coached | Integrated FIT Guide aut

Hello!

It´s usually associated to DDs (Due Diligence's). It means the person is staffed to the group that does DDs, that are normally short and demanding, and hence cannot be staffed or “stolen” (common in consulting) for another engagement. 

Hope it helps!

Cheers, 

Clara

Deleted user
on Dec 06, 2021

I think he is using a "consulting speak" which basically means he has been allocated or locked or booked to work on the DD/PE project. That is, he is very likely not available to be staffed on other projects.

From a business perspective, companies use ring-fence strategy to separate out assets, finances to save for future, protect from taxes & other risks, move to offshore etc. 

4
on Oct 11, 2023
Ex-BCG Principal | 8+ years consulting experience in SEA | BCG top interviewer & top performer

Hi there,

A ringfence is a dedicated team that is ‘closed-off’ from the general pool and are meant to focus on a specific type of work.

  • Ringfence teams manage their own staffing
  • Although they are still subject to the same general evaluation committees

The most common ringfences are Private Equity ringfences, although there are others that are also possible (e.g. Sustainability).

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