Los Angeles-based Lido Advisors, an RIA with more than $10 billion in assets, this week said it had launched a joint venture with IDB Bank to bring Lido’s wealth management expertise to the bank’s clientele.

The new entity will be a separate RIA, said Lido’s chief executive, Jason Ozur, and will be called IDB Lido Wealth.

The venture gives the bank’s clients access to Lido’s portfolio management strategy, specifically its innovative real estate and hedging strategies, said Ozur in an interview with Financial Advisor. Ozur said this strategy particularly appeals to wealthier investors with more than $1 million.

“Modern portfolio theory I think is no longer a truly accepted theory for client investments,” he said. “And I think a lot of institutions are looking for something different and a differentiator in wealth management from an investment perspective. When IDB looked at our investment lineup and our wealth planning propositions for our clients, they realized it was a true differentiator.”

Lido’s alternative investment offering has a heavy emphasis on real estate opportunities, but he said that the firm has branched out. “Sometimes it’s debt on real estate. Sometimes it’s senior debt.” He also says the firm has developed hedging strategies. “We’re able to build portfolios where we call them ‘cap and cushion’ … whereby our clients might get the first 14% of upside on the market over the next 12 months and might get 20% protection on the downside. We have a full options department, so we do that using options.”

As for what IDB brings to the table, Ozur said it will give Lido new service offerings. He points to Lido’s real estate entrepreneur clients. “A lot of them are always pricing out different debt opportunities in the marketplace. If we’re able to bring them another firm that can match or beat a rate they currently have, that’s an added value for our clients.”

For example, he said, a client might have $200 million of debt on $400 million of real estate. “We can take a look at each individual property, look at the current debt they have on the property and we can go to IDB and see if they can improve the rate that they currently have on the portfolio … or [if clients are] building a very large house and they need a temporary construction bridge loan. There’s infinite opportunities for our clients to benefit from this.

“On the Lido side, I don’t get paid a nickel more by doing this. This is just another service we provide them that if we are able to get them a better rate on something, all the savings go to my client.”

Also, he said, “Some of our clients want to have a private banker instead of just using a BofA or a Wells Fargo. … Now we can check that box and introduce [Lido] clients to a private banker and get white glove treatment instead of calling an 800 number.”

IDB is a New York-chartered bank and is the largest Israeli bank operating in the U.S. It has $11 billion in assets, and it also offers private banking to clients in Israel and Latin America, according to its annual report.

Lido grew organically until a couple of years ago. The firm now says it has 22 offices in major metropolitan areas. The firm is fast-growing and went from $4 billion at the beginning of 2019 to more than $10 billion today. In terms of asset growth this year, Ozur said, “We’ve done about $1.7 billion organic and almost $1.4 billion inorganic this year.”