Addepar, the wealth and investment management software company that works with 1,200 firms advising on over $7 trillion in assets, is offering new tools to all its users and growing its list of competitors in the process.
Beginning today, all of Addepar’s customers can add Alts Data Management, which uses artificial intelligence and trained analysts to collect key information about alternative investments, such as account statements, distribution notices, and capital calls, saving investors time and improving the quality of their data on the Addepar platform.
Addepar’s Navigator tool, which came with the company’s 2021 acquisition of Real Capital Innovation and helps investors forecast cash flow related to capital calls and distributions, has also been upgraded. Going forward, Navigator will use aggregated and anonymized data of capital calls and distributions across the Addepar platform to predict activity better.
Perhaps the biggest splash this morning was that Addepar has also used aggregated and anonymized cash flow data from approximately 12,000 funds, 4,400 asset managers, and 115,000 limited partner positions to create its own private fund benchmarks. The company said investors can use the benchmarks to evaluate their holdings and see how they stack up against other asset managers.
Addepar clients will pay more for Alts Data Management and access to the private fund benchmarks. However, the cash flow upgrade made to Navigtor is included in the cost of that tool. The company does not disclose details about its pricing, which fluctuates depending on a customer's size and the parts of the platform they use.
New York-based Addepar was founded 15 years ago and through its core investment performance reporting software, it has collected a mountain of information about how the wealthiest institutions, family offices and other wealth management firms invest. As it adds clients and their portfolios grow, the collection has accelerated. It took Addepar nine years to reach the first $1 trillion on the platform, and now it’s adding $1 trillion every six months and the growth is accelerating, Don Nilsson, chief product officer at Addepar, told Modus.
About 40% of the assets on the Addepar platform are private equity, venture capital, and other alternative investments.
“It was very planful and originally written into all client agreements that we have the right to aggregate and anonymize the data that's on the platform. That didn't end up coming into something tangible until we decided to build private fund benchmarks. It's sort of the long game here. By pretty much every measure, we have one of the largest private fund data sets,” Nilsson said.
He added: “There's a handful of players in this space, but we feel like we are sitting on the highest quality, timeliest data set that's available. So for us, this was a pretty natural next step to pursue.”
In September, Addepar also added the ability to trade and rebalance client portfolios within its platform.
But other companies are already pursuing these things, too, including ones with which Addepar works closely to integrate. There is a growing list of software companies helping investors collect and manage their alts data and glean insights from it. Clients have choices when it comes to cash forecasting, trading, and private fund benchmarking. (Preqin, the alternative data company acquired by BlackRock last summer, announced yesterday that it updated the methodology for its own benchmarks that, covering $11.7 trillion in assets across over 14,000 private funds worldwide, “aim to deliver the most precise, complete, and timely performance data in private markets.”)
Clients are pushing for Addepar to solve more of their problems, according to Nilsson. He said there’s a backlog of other projects but that Addepar has no interest in many things, like attempting to build new customer relationship management software and compete with the likes of Salesforce.
And Addepar, reported in January to be in the process of raising another $250 million in capital at a $3.25 billion pre-money valuation, plans to continue to be an open platform.
“As soon as you try to do all the things yourself, you end up doing a pretty mediocre job at a whole bunch of things as opposed to really crushing it in a few areas. So we try to pick our spots, and we have, over the last several years, continued to expand the aperture of the things that we feel are definitely in our wheelhouse and are things that we think we could do better than anybody else,” Nilsson said.
“I don't think that the strategy of going to your clients and saying, ‘Well if you want to use this, you have to use my version of every piece of this solution.’ I don't think that's a winning strategy.”
Asora Solves Reporting Headaches
Automated data aggregation and simplified performance monitoring give family offices a single source of truth, so you spend less time on reporting and more time making informed decisions.
SEE HOW IT WORKSOther News
- Here are Six Takeaways About the Murdoch Succession Fight. But you should read both the 13,500-word article in The New York Times Magazine based on 3,000-plus pages of the trial record and the article in The Atlantic that is nearly as long.
- AND WE’RE BACK! I’ve written a little about the Corporate Transparency Act drama but gave up on keeping up. However, as of Monday, a stay was granted on another national injunction. That means family offices and millions of other small businesses must comply while the CTA challengers wait for their day in court. At least as of this email, FINCEN has not yet announced when everyone will have to comply.
- If you are cool, you might already subscribe to Emily Sundberg’s Feed Me, her business newsletter with a distinct Downtown vibe. If you are not cool, you might subscribe to Feed Me and pretend to be. And whether you are cool or not, you should read this story about her: Where the Dealmakers and Strivers Get Their Gossip. “If I don’t get [a scoop], then Puck will,” she said, referring to the power-obsessed digital media site. “And if Puck doesn’t get it, Semafor does. And if Semafor doesn’t, The New York Times will — eventually.”
- Tony James’ Family Office Spinout Gets $370 Million for Private Equity Bets
- The Unicorn Boom Is Over, and Startups Are Getting Desperate.
- David Remnick, the editor of The New Yorker, interviewed Bill Gates earlier this month about vaccine skepticism, his fellow billionaires’ political pivots, and his dinner with the President at Mar-a-Lago.
- Trying to buy or invest in a wealth management firm? RIA Growth Catalyst might be an interesting place to start.
Jobs
- A family office in Charleston, South Carolina, is hiring a personal assistant to the principal. This person will be responsible for the children and the grandparents, booking travel, gatekeeping on the philanthropy front, and more. Comp is $150,000 and a bonus.
Other Stuff
- Jan Voss gave Modus a nice shoutout in his Cape May Wealth Weekly newsletter yesterday. In it, he makes a case for small family offices. You should read it (and subscribe); it’s consistently very good.
- Almost 1,000 people have followed Modus on LinkedIn to stay informed between newsletters. You should, too.
- Have a tip for Modus? Email or text me. If it’s sensitive, use Signal on a personal device that is not accessible by your employer (e.g., a mobile phone or computer that is not connected to a company VPN).
- Want to contribute to Modus? Here’s how.
Where I'll be...
- In New York City, freezing.
- In Miami,
poolside, reading, with a cocktailworking, and at Future Proof Citywide March 16-19 to moderate a panel about family office governance. If you’re in town, let me know. - Palm Springs, poolside, reading, with a cocktail.
