Hortz: What are some of the differentiators between the private market platforms available?
Mehta: While there are a few out there, where we think advisors should really consider their options is whether the interface is easy to use by supporting them every step of the way, the quality of analytics, and selection of funds available, plus whether the fees and minimums make sense for clients of varying sizes. That is where we would like to think we really stand out.
Hortz: How do you perform due diligence and select private investments on your platform?
Mehta: Our tenured research team selects each manager on the platform. We focus on providing access to independent, specialist investment managers with strong risk-adjusted returns and disciplined risk management. We seek differentiated investment strategies with established track records over full market cycles and which demonstrate a clear and consistent approach.
Each manager is additionally reviewed by an independent third-party research consultant. Manager evaluation by intermediaries using our platform is facilitated through custom insight on each manager, including firm overviews, track records, agency ratings and access to reporting. We also offer an evolving content library, including whitepapers and market insights.
Hortz: Why is now the moment for private markets?
Mehta: Stock markets have been down and volatile. Interest rates have gone up, making an investor's existing fixed income portfolio decrease in value and highlighting that the fixed income side of a traditional 60/40 portfolio, which you thought was stable, is no longer so. Investors need additional means of generating returns, especially in non-correlated asset classes. Private markets that are less correlated to traditional markets and may offer longer term outperformance potential could be the answer clients need.
There’s a contrarian view that when things are less than ideal in the markets — that’s the right entry point that makes the most sense. Valuations have come down, providing attractive entry points for private equity and venture funds. Rates have gone up, potentially pushing up investment returns in private credit funds. Further, through digital private market platforms, the barriers to entry for clients is significantly lower through highly reduced investment minimums, democratizing access to these once highly exclusive investments.
Hortz: Any recommendations or advice you can offer advisors looking to add more alternative and private market exposure to their clients’ portfolios?
Mehta: While Private Markets continue to grow, the number of advisors in the space has not yet caught up. Clients want the diversification and uncorrelated returns that these investments offer. We think that it makes sense for advisors to explore a tech solution to make their role in helping clients access private markets simple and scalable.
Advisors are busy and need tools to make adopting a new area less of a burden and more of a turnkey solution. Where companies like TIFIN Private Markets come in is we can empower advisors with education and research, an automated process, plus greater access through reduced minimums and fees so these investments are a reality for a variety of clients.
We invite advisors to learn more about the private markets and how to proactively help increase access of this important asset class to your clients by talking to our team today.
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