After a decade-long relationship, Focus Financial Partners, a publicly-traded company that owns more than 80 RIAs managing an aggregate of more than $350 billion, and CAIS, an alternative investments platform used by more than 4,800 wealth management firms, announced on Thursday the launch of a customized alternative investment platform built specifically for Focus Financial’s firms.
RIAs that are part of Focus Financial’s network will get an expanded list of CAIS features and content tailored specifically to each individual firm, the two companies told RIA Intel.
CAIS’s alternative investment strategies currently include hedge funds, private equity, private credit, real estate, digital assets, and structured notes, and the platform is integrated with Fidelity, Schwab, and Pershing.
In addition to getting access to alternative investments offered through CAIS, Focus firms will also be able to add third-party funds not on the platform as well as funds that they’ve specifically created for the CAIS platform (some Focus firms are asset managers), and they’ll be able to directly manage all of them through CAIS.
This will allow Focus firms to manage most of their alternative investments in one location.
Once added, a fund will appear on the menu alongside the traditional marketplace funds that CAIS offers, and it will only be accessible to that firm, unless they or the fund manager chooses to make it available to the broader Focus network.
“We’re now going to add [the] fund that they found, and it’ll become operational and technology efficient, [will] integrate with the custodians, and [will be] available [just for them] to view when they log in,” CAIS founder and CEO Matt Brown told RIA Intel.
This feature is only available to Focus Firms, but Brown said that he expects the company to roll it out to the broader platform at some point in the future.
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All funds offered through the broader CAIS platform undergo an independent due diligence and ongoing monitoring by Mercer, the global investment manager research firm. As an optional feature, Focus Firms can ask to have any new third-party fund evaluated by Mercer, but if they choose to make that fund available to the wider Focus network, it would then undergo Mercer’s rating and due diligence process.
Focus firms will also be able to access customized content from CAIS IQ, a learning tool launched in 2019 that leverages education research and machine learning to personalize short, “bite-size” lessons for each user.
The two firms spent more than a year developing the platform for the Focus network, with pilot programs, such as customized education content from CAIS IQ, tested on one-off firms throughout the year. Today marks the first day that all Focus firms will be able to utilize, at no cost, the new customized CAIS platform.
Focus’s value proposition to its firms — and the reason its revenue has grown and acquisition pace has accelerated — is its ability to develop tailored solutions to client needs, co-founder and chief operating officer of Focus Rajini Kodialam told RIA Intel.
“We have always been in constant communication with our partners on what we call focused client solutions,” Kodialam said. “As we find a quorum of our partners asking for certain capabilities [or] certain access, we take that and we try and create a curated solution.”
Some of the solutions work with existing software and others were developed from scratch, Kodialam said.
“Our entire cash-credit capability that we built was because what RIAs needed for their clients was simply not available, and in this case, we had a lot our partner firms were already working with CAIS, but their needs were distinct,” Kodialam said.
Founded in 2004, Focus Financial offers capital and consulting to wholly owned, subsidiary RIAs. Last year, Focus created its own RIA called Connectus Wealth Advisers, which was designed “for founders and teams who want to continue managing their client relationships and maintaining their boutique cultures while gaining the operational efficiencies of shared services.”
Brown told RIA Intel that the platform was developed free of charge for Focus, and that neither Focus nor its advisors are paying for it. Both CAIS and Focus said the platform was created at the behest of Focus, its RIAs, and CAIS.
“Focus has been a very important relationship and client for CAIS for over a decade. It’s one reason why we know them so well and have worked with them for so many years. To be able to have a vision around creating such a new platform experience is just something CAIS is doing for them, and they’re not paying for that,” Brown said.
Holly Deaton (@HollyLDeaton) is a staff writer at RIA Intel and based in New York City.