Dynasty Financial Partners seeks to significantly expand the availability of technology-focused venture capital funds for its network of registered investment advisors.
Ed Swenson, co-founder and COO of Dynasty
Photo illustration by Barron’s Advisor. Provided by Dynasty Financial Partners
RIA Service Provider today announced a partnership with Allocate, a digital investment platform that facilitates investments in top-tier venture capital funds focused on start-ups in the technology and life sciences sectors.
Plunging stock markets and the reluctance of more business leaders to go public of their own companies have increased interest in alternative investments, but VC funds are generally owned by the richest and most connected individuals. It remains off-limits to non-investors.
Dynasty co-founder and COO Ed Swenson said in an interview:
“This helps us offer something unique in a market that our clients may not always have access to,” added Swenson. “A big part of the story is that it provides access to a part of the market that in the past was really cut off except for institutional investors.”
Allocate’s platform is aimed at wealthy advisory clients. To qualify as an accredited investor, you still have to meet regulatory standards. But the size of its user base allows clients to achieve purchasing power comparable to institutional investors such as pensions and endowments that have typically controlled investments in VC funds, said CEO and co-founder Samir Kazi. says. If a VC fund requires an institutional investor to invest a minimum of $5 million or he says $10 million, Kaji says his RIA clients using the platform will make a minimum investment of $100,000 or he said $250,000. I said I just need to fill it.
This partnership will significantly expand Allocate’s reach within the wealth management sector, although the company already has a significant presence at an early age. Founded late last year by a veteran of the financial and private funds industry, Allocate is already working with 46 of his RIAs managing $116 billion in assets, Kaji said. Allocate also works with telecommunications companies, commercial banks, and other financial services companies.
The Dynasty and Allocate service models have something in common. Both are technology-focused companies that promise to take care of the behind-the-scenes work so their partners don’t need it. For Dynasty advisors, this means providing a suite of technology tools and business services to help them focus on building their practice. Similarly, Allocate offers a suite of compliance services to handle the inherent and substantial administrative burden associated with the types of investments it facilitates.
“It’s the easy, frictionless technology that allows our clients to invest in these products,” Kaji said in an interview. “In all private his markets, there is a lot of friction involved in everything from filling out subscription documents to performance reports. We make everything super easy for both our advisors and their clients. ”
Allocate also conducts extensive due diligence reviews on each fund manager encountered and handles compliance with know your customer and anti-money laundering regulations.
Don’t underestimate the importance of these challenges.
“Investment vehicles have become more automated and scaled, allowing wealth managers and advisors to access these opportunities in a scalable manner for their clients,” said Swenson. “In the past, all the documentation and all the paperwork that went with direct investment was a huge gating factor.”
The firm also offers educational services in the form of webinars and other materials to help advisers navigate what Kazi sees as “peculiar asset categories” and to help clients identify specific funds at risk. It will help you decide if it fits your tolerance.
“By definition, if you are investing in an early-stage company, [it] They have different risk and return profiles. ”
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