This edition of the Investments Roundup features Arch raising $52 million in Series B funding, Pacific Life launching fixed indexed annuities, Templeton partnering with institutional managers for individual investments, Morningstar acquiring CRSP from the University of Chicago, Simplify launching a private credit ETF with a credit hedge, CAIS increasing its alts offerings, Oppenheimer expanding its custody and prime services platform, Raymond James launching actively managed ETFs, HFR reporting on hedge fund strength in Q3, Private Advisor Group adding three strategists to its platform, SMArtX adding seven new strategies, and Schwab partnering with CAIS on alts funds execution.
Also, we have some exciting news: We are going to serve you better by switching to a new website platform that will improve our layout and function, as well as manage the demands of rapid growth. This change will be implemented in the coming weeks. When we convert to the new platform, we will simply ask you to enter your email address and confirm it through a link we will send you via email. Thanks for your help as WSR grows!
Larry's Take
In light of yet another round of tariff news and a stock market tumble, it’s good to take a step back and examine reasons for optimism. HFR reported the best quarter since early 2021 for hedge funds, listing drivers from falling interest rates to increased investment in AI infrastructure.
Ken Heinz’s analysis of the record surge for hedge funds also gave credit to “falling geopolitical risk, record equity levels (and) acceleration of M&A.” It reads like a breath of fresh air. There’s still plenty of bad news out there, but it pays to remember the good news that drove markets to recent new highs.
In the face of industry challenges and struggles from adapting to technological evolution to bolstering organic growth, we have much to be excited about, including product and service innovations, time-saving tech, investors valuing our space highly and the ability to provide excellent service for millions of clients. Don’t let some temporary setbacks get you down.
If you would like to discuss this Larry’s Take further, including how these trends might impact your business, please contact me at larry.roth@ascentix.com.
Arch Completes $52 Million Series B Funding Round For Private Markets Infrastructure
New York City-based Arch completes a $52 million Series B funding round, led by venture firm Oak HC/FT. Participants include Menlo Ventures, Craft Ventures and Quiet Capital. Arch, an alts management platform operator, says the capital will fund infrastructure expansion and development.
Arch has over $250 billion in private market assets on its platform, up from $100 billion 14 months ago, according to the firm. The company provides a data management platform for alternative investments for financial advisors, banks and accounting firms.
“Investors in private markets have long been underserved – dealing with fragmented data, clunky workflows and high fees,” said Ryan Eisenman, Co-Founder and CEO of Arch. “With this new capital and the support of our partners, we’re expanding our suite of CIO tools, developing new features within our client portal and enhancing reporting capabilities for LPs.”
Pacific Life Launches Two Fixed Indexed Annuities
Newport Beach, California-based Pacific Life launches two fixed indexed annuities. Pacific Index Foundation 2 and Pacific Index Income both come with the option to lock rates and caps for the duration of the withdrawal charge period or to renew annually.
Pacific Index Foundation 2 also has an optional interest enhanced beneficiary benefit, while Pacific Index Income comes with a guaranteed lifetime withdrawal benefit with increasing income. Both annuities offer a choice of three withdrawal charge periods, an initial guarantee period, six indexes and 10 index-linked interest-crediting options. The new products replace two previous offerings, Pacific Index Foundation and Pacific Index Edge.
“We’re continuously innovating our offerings as the retirement-planning landscape continues to shift for financial professionals and clients alike,” said Kevin Kennedy, Chief Sales and Marketing Officer of Consumer Markets at Pacific Life. “We want clients to have more choices without sacrificing protection, and we believe these new products can be powerful considerations to help keep them confidently saving.”
Templeton Teams With Institutional Managers For Individual Investments
Franklin Templeton partners with sustainable infrastructure firm Actis, fund manager Copenhagen Infrastructure Partners (CIP) and digital infrastructure investor DigitalBridge to provide private infrastructure solutions to individual investors. The firms plan to provide private wealth clients with access to infrastructure opportunities with the themes of digitalization, electrification and energy security, as well as sectors including data centers, hyperscale data center development, digital power, fiber and towers, and renewable energy, they said.
DigitalBridge will enable the partnership to invest in the digital advancements, including AI, by investing in data centers, cell towers, fiber networks, small cells and edge infrastructure, according to the firms. CIP’s portfolio of energy infrastructure projects and industry expertise are expected to enable the partnership to leverage opportunities in the global energy transition. Actis invests in infrastructure assets with defensive profiles in the power, transmission, transport and digital sectors.
“Digital infrastructure is a core driver of the global economy, and private wealth investors are increasingly seeking access to opportunities that have traditionally been reserved for institutions,” according to Marc Ganzi, CEO of DigitalBridge. “Partnering with a global distribution leader like Franklin Templeton allows us to broaden access to this asset class at a pivotal moment, as artificial intelligence, electrification, and next-generation connectivity accelerate demand for digital and energy infrastructure.”
Morningstar Acquires CSRP From The University Of Chicago
Morningstar enters an agreement to acquire the Center for Research in Security Prices (CRSP), a provider of historical stock market data and indexes, from the University of Chicago. The $375 million deal, expected to close in Q4, will make Morningstar one of the top index providers for U.S. equity index funds, the company said.
The sale includes the CRSP Market Indexes. These indexes are the benchmarks for many widely used mutual funds and ETFs, including Vanguard Total Stock Market Index Fund (VTSAX and VTI) and Vanguard Mid-Cap Index Fund (VIMAX and VO), Morningstar said.
“A hallmark of economic scholarship at the University of Chicago has been the rigorous use of data to unlock fundamental market insights, for the benefit of scholars as well as investors – and CRSP has made vital contributions to those advances,” said Madhav Rajan, Dean of the University of Chicago Booth School of Business and Chair of CRSP’s Board of Directors. “As CRSP and Morningstar embark on a new chapter, Morningstar is a natural fit for CRSP's strengths, and it brings the business insights, experience, and capacity required to make full use of, and build upon, CRSP’s potential.”
Simplify Adds ETF Providing Private Credit Exposure With Built-In Credit Hedge
Simplify Asset Management launches the Simplify VettaFi Private Credit Strategy ETF (PCR), which represents the firm’s entry into private credit and, it said, gives investors private credit exposure with a credit hedge strategy. The new ETF’s strategy is to track the returns of the VettaFi Private Credit Index, which is based on business development companies (BDCs) and publicly traded closed end funds (CEFs) that are mainly invested in private credit, according to Simplify.
PCR is part of the alternatives and income-focused segments of Simplify’s ETF portfolio, which this year has added new barrier income and target distribution ETFs in May, a long/short currency strategy and other offerings, it said.
“Simplify has a history of making institutionally-oriented strategies, especially alternatives, available to our clients, with examples including CTA — our managed futures ETF — and the more recently launched FOXY, which aims to harvest yield in the currency market,” said Chris Getter, Managing Director, Emerging Markets Strategist at Simplify.
CAIS Further Expands Alts Offerings As Demand Continues To Grow
CAIS announces that it further expanded alternative investment strategies from several global asset managers that are available on its CAIS Marketplace, increasing options for advisors looking to create more diversified client portfolios. The latest expansion features alts strategies from asset managers including BlackRock, Franklin Templeton, Goldman Sachs, Morgan Stanley Investment Management and Nuveen, according to CAIS.
Over the past year, these and other asset managers introduced new strategies on the CAIS Marketplace that ran the gamut across infrastructure, private debt, private equity and real estate, delivered via structures such as business development companies (BDCs), interval funds and non-traded REITs, CAIS pointed out.
“The shift toward private markets as a core portfolio pillar is happening now, not later,” said Brad Walker, Co-President of CAIS. “As private markets become more accessible, expanding the CAIS Marketplace at this moment, we’re ensuring advisors have timely access to leading managers, strategies and investment structures to meet their clients’ investment needs and objectives.”
Oppenheimer Expands Custody And Prime Services Platform For Managers
Oppenheimer expands its custody and prime services (CAPS) platform to meet the changing needs of managers. The firm is integrating its fixed income custody business into the enhanced platform, which will support global fixed income, equities and listed options.
Launched in 2022, CAPS uses Oppenheimer’s self-clearing and custody infrastructure to provide custody and execution support to small and mid-sized hedge funds, investment managers and family offices. The expansion is in response to growing demand from emerging managers, and Oppenheimer is adding senior client services staff to support business growth, the firm said.
“The CAPS platform is a key part of our long-term institutional strategy,” said John Hellier, Senior Managing Director and Head of Equities at Oppenheimer. “As the custody and prime services landscape evolves, we’re committed to supporting our clients’ needs with thoughtful, scalable solutions that reflect our institutional strengths and long-standing focus on relationships.”
Raymond James Launches Its First Active ETFs
Raymond James Investment Management announces that its first three ETFs started trading on the New York Stock Exchange. The three ETFs are actively managed by investment teams at Eagle Asset Management, a boutique manager of the Raymond James subsidiary.
RJ Eagle GCM Dividend Select Income ETF (RJDI) is a U.S. large-cap equity ETF focused on generating income and growth via companies with strong fundamentals and shareholder-friendly capital return policies. RJ Eagle Municipal Income ETF (RJMI) is an actively managed municipal fixed income ETF that stresses disciplined credit selection, risk-aware portfolio construction and diversification across the municipal yield curve. RJ Eagle Vertical Income ETF (RJVI) is a fixed income alternative that seeks to deliver diversified income and long-term capital appreciation through a flexible, multi-asset approach.
“As Raymond James Investment Management’s legacy boutique, Eagle has built a reputation for actively managing portfolios that focus on income generation through fixed income and dividend-paying equities, while successfully navigating shifts in market environments,” according to Susan Walzer, President of the firm’s Family of Funds. “With today’s launch, we’re expanding access to the trusted strategies already run by Eagle’s portfolio managers in a more transparent and tax-efficient structure.”
Hedge Funds Up 5.7% In Q3 For The Strongest Quarter Since Q1 2021, HFR Reports
HFR reports that hedge funds rose 5.7% in Q3 for the strongest quarter since the first quarter of 2021. The sector was aided by strong performance in September as the Federal Reserve lowered interest rates and M&A activity was propelled by corporate AI investment. In September, the HFRI Fund Weighted Composite Index was up an estimated 2.4%, while the HFRI Asset Weighted Composite Index rose 2.7%.
The HFRI Macro (Total) Index gained an estimated 3.4% for the month, driven by falling interest rates and commodity gains, HFR said. The HFR Cryptocurrency Index jumped 6.7% in September and the HFRI Multi-Manager/Pod Shop Index increased 1.1%.
“Hedge funds posted a record surge in the third quarter, accelerating strong gains led by Systematic Macro and Equity strategies, with powerful risk on sentiment driven by lower interest rates, falling geopolitical risk, record equity levels, acceleration of M&A, and unprecedented strategic investment in AI development, capabilities and infrastructure,” said Ken Heinz, President of HFR.
Private Advisor Group Adds Three Model Portfolio Providers To Its Platform
Morristown, New Jersey-based Private Advisor Group adds three investment strategists to its WealthSuite platform. Model portfolios from Capital Group, Franklin Templeton and Goldman Sachs are now available, bringing the total number of investment strategists available on the platform to 11.
Launched in October 2022, WealthSuite’s offerings include mutual funds, ETFs and blended model portfolios. It also offers custom indexing and tax-optimized solutions through separately managed accounts. Private Advisor Group was founded in 1997 and had over $41.3 billion in assets under management as of June 30.
“Adding Capital Group, Franklin Templeton, and Goldman Sachs to the WealthSuite platform underscores our commitment to providing advisors with diverse, high-quality investment approaches,” said James Sullivan, Head of Advisor Advocacy & Technology at Private Advisor Group. “These strategists bring distinct portfolio construction methods and asset allocation options that expand the flexibility and customization available to help meet a wide range of client objectives.”
SMArtX Adds Seven New Strategies To Its Platform
West Palm Beach, Florida-based SMArtX Advisory Solutions adds seven new strategies to its platform, bringing its total offering to 1,566 strategies from 322 asset management firms. RSW Investments, a new SMArtX partner, added a market duration fund.
Existing partner JP Morgan Asset Management expanded its offerings on SMartX’s Manager Marketplace to include an equity income fund. KraneShares added four new strategies: Strategic Wealth Balanced, Strategic Wealth Cautious, Strategic Wealth Conservative and Strategic Wealth Growth. ZEGA Investments added one fund, ETF Dividend Max.
"The SMArtX Manager Marketplace continues to expand, providing advisors with an ever-growing list of investment options to create personalized portfolios for their clients,” said Brad Haag, Executive Vice President of Asset Manager Solutions at SMArtX. “This growth allows us to support the increasing demand from clients asking for more solutions across the platform.”
Schwab And CAIS Partner On Alts Funds Execution For Advisors
Schwab Advisor Services and CAIS expand their technology integration to include execution of ticker-traded alternative investments on the CAIS platform. With the integration, advisors are able to access and trade both ticker-traded and subscription-based funds through a CAIS account profile. This collaboration allows for simplified processes and a more streamlined advisor workflow on a range of alternative investments, CAIS said.
CAIS is an alts platform supporting more than 62,000 independent advisors who oversee approximately $7 trillion in end-client assets. Founded in 2009, the firm is headquartered in New York City and has offices in Austin, Texas; London; and Red Bank, New Jersey.
“We’re excited to deepen our work with CAIS to help advisors simplify their operations and manage alternative investments more efficiently,” said Alison Dooher, Head of Digital Advisor Solutions for Schwab Advisor Services. “Together, we’re making it easier for advisors to access alternatives within their existing workflows, with greater transparency and reduced operational complexity.”
Wealth Solutions Report can be reached at info@wealthsolutionsreport.com.
