7. Private equity firms are seeking to reach RIAs’ clients.
A number of big investment managers like KKR and Apollo are putting in major efforts to gain access to retail investors through RIAs, Oros said. These investments, once only available to institutions and accredited investors, have never been more accessible to retail investors, he said.
Many of Hightower’s clients, Oros said, are ultra-high-net-worth investors who made their money through investing in a single asset. These investors have an appetite for thematic investing and are not necessarily looking to invest through a 40 Act mutual fund. Hightower recently launched a cybersecurity fund in conjunction with an outside manager that has drawn a lot of interest from some clients, he said.
Why are private equity firms eyeing up RIAs’ clients? These firms see a big opportunity for growth, Oros said, pointing out that some of these firms have dedicated as many as 100 people to building out this market.
Koch mentioned that her firm will be bringing some of their alternative investing capabilities to the wealth management market through both existing structures and dedicated offerings. The hardest part of this process, she added, is figuring out the type of vehicle and structure that is acceptable to the wealth management market as a whole.
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