Kevin Shields, the founder, chairman, and chief executive of Griffin Capital Company, said his $20 billion alternative investment manager has “robust” distribution. But he was eager to partner with iCapital Network, the fast-growing marketplace for the same asset class, in his effort to make Griffin’s investments more accessible to RIAs.
“In the RIA space, I like to believe that it is akin to getting the Betty Crocker seal of approval,” Shields told RIA Intel.
“It’s been a long process with iCapital to get to where we are. I think it really speaks to the level of diligence homework that they did on us as a sponsor. I give them a lot of credit. They made us go through a lot of hoops.”
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Griffin had been in touch with iCapital for a few years, but only recently did it make sense to launch a new fund on the platform, one raising capital to invest in opportunity zones. The fund is similar to others on the platform and the timing was right. Now, wealth managers can review an iCapital report on Griffin — one unavailable to the asset manager — to help them decide whether to invest in it.
Lawrence Calcano, CEO of iCapital Network, wants the platform to be an “end-to-end” solution that helps financial advisors learn about and allocate to alternative assets. In January, it acquired AI Insight, an education, research, and compliance company. It has also acquired eight companies (including a platform from Wells Fargo’s Global Alternative Investments division) to bolster its technology.
Shields was impressed with that technology, a major appeal to asset managers. For example, a simplified subscription document process (which Griffin’s fund on the platform requires) makes investing in alternatives much easier for wealth managers, especially RIAs. The platform also provides better transparency into each step of the investing process to both advisors and their clients.
Griffin’s assets are split roughly three ways between the so-called wirehouses (Bank of America’s Merrill, Morgan Stanley Wealth Management, Wells Fargo Advisors, and UBS Wealth Management), independent broker-dealers like LPL Financial, and independent RIAs. But lowering loads, better liquidity, platforms like iCapital, and the growing number of RIAs mean they will likely account for a bigger percentage in the future.
“The RIA channel is hugely important to anyone who has a retail distribution and focus” like Griffin, Shields said. His company already has a designated group of wholesalers focused on RIAs, which might expand in the future.
Asset managers can visit wirehouse offices and meet and speak with a dozen or more advisors in the day. There are fewer of those opportunities with RIAs because those advisors are spread across different organizations and demand a more consultative relationship. But most RIAs are relatively small businesses where a short list of employees wield a lot of power — sometimes deciding how to allocate $1 billion or more.
Shields has high expectations for Griffin’s debut fund on iCapital but admitted he had “no idea” what exactly it will mean for it.
“This is our maiden voyage,” he said.
As of April 30, New York City-based iCapital serviced $75 billion in global client assets across more than 750 funds. The company also recently partnered with AssetMark, the $74 billion turnkey asset management platform, and with private equity giant KKR to create its own investment company and inherit and manage a $430 million fund.
Michael Thrasher (@Mike_Thrasher) is a reporter at RIA Intel based in New York City.
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