FinCap opens private investments menu for advisers

FinCap is launching a managed account platform in June which will help wholesale investors access professionally managed private asset exposures.

It has also appointed BCA Research as a research partner to support the development of asset allocation and portfolio construction frameworks for the forthcoming platform.

FinCap executive chair Christian Ryan noted demand has been growing from advisers who want to allocate to private assets, but have limited resources and specialist focus just on private assets.

"We're bringing institutional grade resources and competencies to the wealth channel because at the moment I think it exists in a very limited way," Ryan said.

Financial Standard reported last year on Pinnacle Investment Management's investment in FinCap to support the launch of a private assets managed accounts platform.

Ryan said FinCap will have an investment team that will work with advisers to have their own portfolios on the platform, and it will also work with asset consultants who wants to offer their portfolios.

"The platform will have a menu of different models or portfolios that advisers can select," he said.

The challenge with existing managed accounts, Ryan said, is that their primary infrastructure is focused on daily liquidity investments like shares and ETFs.

"But the reality is there's the other 90% of the market is all sitting in private assets," Ryan said.

"There hasn't been a technology that allows you to run a portfolio of these products for private assets, because private assets have multi duration liquidity profiles."

The platform will allow monthly contributions and quarterly withdrawals. To assist in managing the liquidity profile in each managed portfolio, Ryan said FinCap will have a liquidity management team.

"We want this to be a central marketplace for managing and trading private assets," he said.

"Having a dedicated liquidity management team means that we play a very strong Treasury cash flow role in monitoring of the portfolios."

"In the platform, if five advisers want to sell five units and I've got five advisers that want to buy five units, I can match it off and trade in the platform. So, if you've got a buyer and a seller, they net it off," he said.

FinCap will also provide detailed due diligence on all the managers on the platform.

"If a fund manager comes on our platform, it would have had operational due diligence done, investment due diligence done, tax and legal and financial of all their funds to make sure that who they are, what they do is really good," Ryan said.

"We will be select in our manager relationships so we can have a strong focus on ongoing monitoring of their investment holdings and their processes."

FinCap recently nabbed ex-Zenith partner Ben Davis as its new head of portfolio construction and investment solutions for its platform.

Davis will work closely with BCA Research to help integrate frameworks into the platform's managed portfolios.

"Private markets portfolio construction has historically been the domain of large institutions with dedicated resources," Davis said.

"What we're building at FinCap changes that. Increased manager specialisation and the rise of evergreen investment structures have broadened access beyond traditional multi-strategy platforms."

Mercer head of wealth management investment solutions Rebecca Jacques welcomed the new platform by FinCap.

"I think private markets has got a long way to go in terms of being able to do things in the same manner from a technology perspective," Jacques said.

"But it's certainly coming, and I'm really pleased that people are trying to manage this, because a lot of the effects that you're seeing of liquidity constraints and all of that are a concern. And they need to be managed."