Registered investment advisors are going to see continued attention from private market asset managers and providers as they pitch both existing and forthcoming investment options, according to a panel at Wealth Management EDGE on Tuesday at The Boca Raton Resort in Boca Raton, Fla.
Matthew Magill, director, global wealth solutions and head of RIA and bank trust at KKR, said the RIA channel is “one of the fastest growing channels from an AUM perspective” for the firm’s private market offerings.
“The RIA channel is actually the fastest growing pool of capital that we have at the firm from a year-over-year percentage basis,” Magill said. “It’s quite exciting to see the continued adoption of private markets from the wealth community.”
Chelsea Ganey, chief strategy officer at Moran Wealth Management, said she has been tasked with finding the right fund structures and technology for RIA advisors to offer private market investments to clients. However, she has sometimes been excited by a fund that gives access to private markets, but when she presents it to advisors, they “aren’t interested.”
That has caused her to shift the process to bringing advisors in earlier for assessment.
“That is something I’m working on now, bringing in our advisors on that process,” she said. “I say, ‘here’s why I think this is great, how do you think it will resonate with your clients?’ That will make them more inclined to sit down and talk about it in their meetings.”
Despite the challenges of implementing the offering, Moran’s Ganey said the RIA is committed to bringing private market options to its advisors and clients.
“We know that it’s the right thing to do for the volatility of our client portfolio, so we needed to figure out a way to get into it,” she said.
In the fireside chat, David Bodamer, editorial director at WealthManagement.com, asked about individual investors’ relatively light uptake of evergreen funds despite the widespread push as the easiest vehicle to offer private market investing.
Robb Falaguerra, managing director of Apollo Global Management, said he sees evergreen funds taking hold so that individual investors can access what has historically been used only at an institutional level.
“Now, with the interval fund and the BDCs (business development companies) being more mainstream, you can now truly get that institutional experience,” Falaguerra said.
Ganey agreed that evergreen structures are advisors’ “go-to choice.” She said it would “have been much more of an uphill battle to get into this if we didn’t have access to vehicles like that, and it opens [private investing] up to a broader base of our clients.”
Bodamer also asked the panelists if there was potential for RIAs to access multiple private market funds simultaneously.
Falaguerra said the type of technology to offer a “sleeve of evergreen funds” is months, not years, away from being possible. He said the offering could come through an outsourced CIO, a TAMP or a third-party vendor.
Magill of KKR said technology has helped simplify getting individual investors into private markets in areas such as e-signatures and digital reporting, as opposed to paperwork and mailings.
“We’re at the early innings of where we are going,” Magill said. “But these changes are coming fast.”
He also sees Turnkey Asset Management Platforms considering the funds, which will widen their reach with advisors.
“I’ve had more conversations with TAMPs in the past six months than I have in the past 15 years,” he said.
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