In 2014, Srikanth Narayan landed what many software developers would have considered one of the hottest jobs in tech: managing a team of engineers at Uber. Funding rounds at the time pegged the startup’s worth at $51 billion, making it one of the most valuable in the world.
Narayan worked at Uber for almost six years and the rideshare company went public during his tenure, creating a fortunate problem for him. The value of Narayan’s equity in the company had ballooned, and it was more liquid, but he was riding the wave of a highly concentrated stock position.
In a newsletter like Modus, the story above probably caused readers to yawn. Millions of founders, executives and employees are awarded equity and participate in stock purchase programs, and then they are faced with diversifying and protecting their wealth. There are well-known ways to manage this, and there is no shortage of financial professionals eager to help someone figure out which one is best.
Narayan explored what to do about his Uber shares and didn’t love most of the solutions (direct indexing, charitable giving, covered calls) that banks and wealth managers presented to him. But he was intrigued by exchange funds, which take stocks from multiple investors and pool them into a single fund, giving each investor a stake in the fund. The various stock contributions by investors collectively create a more diverse pool of assets, and the transfer into the fund defers a taxable event.
Narayan liked the idea of the exchange fund, or “swap” fund, but felt the ones shopped for him were clunky and expensive.
Knowing there were other professionals like him, in 2022, Narayan founded Cache, intending to make exchange funds and related products more accessible and lower their costs. So far, it’s achieved that. Historically, exchange funds required an investor to contribute at least $1 million worth of shares and their fees were as high as 2 percent. Cache will take lumps of shares valued as low as $100,000 and charge as little as 50 basis points.
Cache exchange funds close every two weeks, instead of quarterly or semiannually like others, and have greater capacity. Narayan said that some funds offered by other investment firms have long closed to shares of companies like Apple and Meta to maintain their diversity, a problem that Cache hasn’t faced yet.
As of mid-January, Cache has onboarded over 125 different stocks into three funds (each with 55 and 70 stocks) and a total of more than $300 million in assets under management. Hundreds of investors are waiting to contribute more than $1 billion in shares to Cache funds, the company said.
Ultrawealthy investors, including those with family offices, have long used exchange funds and other like-kind transfers to diversify their holdings (especially real estate) tax-efficiently. Any client who might benefit from an exchange fund has almost certainly heard about or been pitched one by the large banks and brokerages that create or offer them.
Cache has focused on less-wealthy clients who might find exchange funds a fit and the firm is not actively seeking out family offices. “It's too opaque a world for us to have any kind of concerted go-to-market” strategy for family offices, Narayan told Modus.
Nonetheless, Narayan said offices are finding his firm and he expects more will become Cache clients. Prices of some tech stocks remain dramatically higher than they were a couple of years ago, and President Donald Trump’s second stint in the White House has brought much market uncertainty. Investors that haven’t recently done some rebalancing or diversifying are exploring their options, drumming up more inbound interest in Cache.
The company has helped multiple family offices diversify $10 million positions in a single stock. For months, some other clients have been more slowly diversifying positions in $100,000 chunks every two weeks.
Exchange funds aren’t helpful to many family offices, which might find donating shares or covered calls better suited for their needs — assuming they have any single-stock problems. Cache also maintains strict market cap restrictions and portfolio criteria and has turned away some family offices with concentrated positions in small-cap companies.
The family offices that have approached Cache and become clients are usually long-term investors in the Magnificent Seven — Apple, Microsoft, Amazon, Alphabet, Meta, Nvidia, and Tesla — that have been outsized drivers of market growth. Nvidia's 171.2% return last year accounted for more than one-fifth of the entire market’s gain. Some have contacted Cache about help with concentrated holdings in biotech, industrials, aerospace, and finance.
“Most family offices manage taxable accounts, and given the extraordinary growth of these stocks," Narayan said. "Many are seeking tax-efficient ways to trim their positions.”
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A correction and a clarification made on February 7, 2025: A previous version of this newsletter online incorrectly reported that Srikanth Narayan started working at Uber in 2015. He started working for the company in 2014. The newsletter was also updated to clarify that Cache has helped multiple family offices manage concentrated stock positions worth $10 million or more, not just a lone family office.
