Category Archives: AltsTech News

Fraud Risks for Alternative Fund Sponsors and How to Reduce Your Exposure

Fraud Risks for Alternative Fund Sponsors and How to Reduce Your Exposure

June 14, 2021 | James Sprow | Blue Vault 

 Blue Vault Webinar on June 9, 2021, featuring:

• Amy Small – SVP, Director of Institutional Custody, UMB Bank

• Anthony Rogers – SVP, Director of Fraud Operations, UMB Bank

• Chelsea Cook – VP, Enterprise Fraud Program Specialist, UMB Bank

Introduction

Fraud is an intentional or deliberate act to deprive another of property or money by deception. UMB’s main goal:  Protect the assets of our customers at the bank. (Fraud prevention is not viewed solely as a compliance exercise.)

Four Pillars of Fraud Prevention Program

• Fraud Prevention – activities and controls designed to limit the ability of fraud to occur in the first place

• Fraud Detection- dedicated monitoring efforts, identifying suspicious and anomalous behavior

• Fraud Response – once a fraud event has occurred, response focuses on what happens next (investigation, root causes, etc.)

• Fraud Recovery – action engaged to locate and recover stolen funds on behalf of the customer and/or the bank if possible

Education and training – fraud awareness programs provide a strong fraud prevention lift by engaging employees and customers in recognizing and reducing fraud risk.

Types of Fraud Risks

Identity Theft

ID Fraud has two main forms:

    • Fraudulent Applications – This involves attempts to use fraudulent identity information to obtain a new account

    • Account Takeover – This involves attempts to fraudulently gain access to existing accounts

Mitigation

• Data – Comparing info on application to various valid data sources

• Risk models – use of tools that score transaction or application, also score risky devices

• ‘Negative lists’ – Credit bureau or other industry alerts of known fraud

• Multi-factor authentication – at least two of the following:

› Something you know (knowledge factor) – password

› Something you have (possession factor) – phone or key fob

› Something you are (inherence factor) – voice or fingerprint

Card Fraud

• Counterfeit – fake cards with real account information stolen from victims

• Lost / Stolen – criminals know the clock is ticking until lost/stolen card is reported missing

• Non-Receipt – interception of a card before victim even has possession

• Card Not Present – criminals steal basic card information and use it to buy goods and services at e-commerce, phone and mail-order merchants

• Fraud Prevention Tips:

› Online banking tools to monitor account

› Text alerts

› Review statements

› Notify bank asap of card fraud or stolen/lost card

› Safe storage and use of cards

› Addressing Card Fraud – Strategy Development

              • Fraud strategy development is a fluid process with a general process:

› Identify fraud trends through reporting, fraud claims, overall analysis

› Analysis performed on the identified trends

› Mitigation strategies developed and tested

› Monitor effectiveness

› Make adjustments

Check Fraud

• In 2018, check fraud accounted for 47% or $1.3 billion of industry deposit account fraud losses

• Counterfeits, forgeries, and check alterations remain the most common check fraud types

• Scam deposit fraud also remains popular year over year

• Fraud Prevention Tips:

› Online banking tools to monitor account, text alerts

› Review statements

› Notify bank asap

› Positive Pay

› Paper Draft Block

› Dual control for reconciling

› Awareness on phishing and social engineering

Wire Fraud

• Wire fraud is the use of international wire networks to perpetrate fraud

• Sending a wire is like sending cash – there is no way to recall a wire once it has been sent, and chances of recovery are very low

• According to the SWIFT wire network, banks using SWIFT sent over 35 million transactions per day in 2020

ACH Fraud

• ACH Fraud is the use of Automated Clearing House network to perpetrate fraud

• All that is needed is the ABA routing number and an account number

• According to NACHA over $23 billion in ACH payments were made in 2018

• 24 hour window to return a business ACH/60 days for a personal account

• Fraud Prevention Tips:

› Use online banking tools to monitor an account

› Review statements

› ACH filters

› Awareness on phishing and social engineering

What is Social Engineering?

Social engineering is an in-person or online attack used to trick individuals into breaking normal security measures or routines.

It is our nature to trust and want to help. Cybercriminals use psychology and human nature to try to get you to bypass important security controls.

The attacker will attempt to:

• Deceive by presenting themselves as someone that can and should be trusted

• Communicate in person or through an online private message that appears harmless or even useful

• Prey on your emotions to encourage you to help them get through security protocols

What is Phishing?

Phishing scams are the most common types of social engineering attacks

These scams direct you to a fake website or install malware to allow cybercriminals to steal and use your credentials.  Once they have any authority you do, they can set up fraudulent wire transfers to steal customer funds or move secure files outside the controlled network.

They seek to obtain confidential information:

• System credentials

• Account information

• Social Security Numbers (SSN)

They use:

• Shortened URLs

• Sites that appear legitimate

They attempt to:

• URL link redirect you to a page to try to harvest your credentials

• Ask you to break routine and transfer funds outside normal protocol

• Introduce an executable malware file (.exe) through an email attachment that will do damage deceptively behind your workstation

Best Practices to Detect Phishing

•  Always look at the sender’s email address.  Think it’s from someone you know? An added letter or number in the address is a sign that it could be a compromised email account

•  Hover over the link with your mouse.  This will help make sure it is a valid link with destination name in the address.

• Never reply to an email unless you know for certain it’s valid.  Don’t try to find a reason to validate why someone is emailing you – it’s ok to be suspicious!

• Is the email general and not personalized?  Does it contain words like “Hello” instead of your name?  Watch for tone, poor spelling, and generic sign offs like “Regards” or “Thanks” with no name

What is Business Email Compromise?

A business email compromise (BEC) is a phishing scam that targets businesses and financial institutions to commit wire fraud.

How does it happen?

• A fraudster identifies himself as a high-level executive (CFO, CEO, CTO, etc.), lawyer, vendor, customer, or other type of representative

• He or she claims to be handling confidential or time-sensitive matters and initiate an urgent wire transfer to an account that they control

• If you don’t follow normal security controls to confirm the request using customer data on file funds lost through BEC can be permanently lost, leading to a loss of business, reputational damage, corrective action, etc.

Per the FBI, BEC is now the biggest cause of cybercrime financial losses for US organizations: $1.7 billion in reported losses in 2019

BEC is the fraud sweet spot – social engineering mixed with phishing that results in a big payoff

• Payment instruction changes

• Urgent wire requests

• Urgent requests from senior leaders or CEOs

Fraud Mitigation Tools / Solutions

•  Risk based & proactive monitoring – anticipating trends, early detection on emerging trends

• Pattern recognition – neural networks and machine learning (How does the fraudster’s behavior differ from legit transactions?)

• ‘Time is Money’ – fraud needs to be stopped in relevant time

• Industry solutions – many vendors & associations, from sophisticated AI machines to “snake oil”

• Collaboration among banks and other parties – consortium data, forums & conferences

• Law enforcement engagement

• Investment in technology, people and training

The top 5 challenges of investor onboarding and the need for digitization

The top 5 challenges of investor onboarding and the need for digitization

May 19, 2021 | Jonathan Marr, Sr. | SS&C

Investor onboarding in today’s environment is crucial; organizations are choosing to digitize their investor onboarding experience to create a solid, long-term, mutually profitable relationship with investors.

Today, if an investor wants to invest in a fund, they have to manually complete a subscription document. These documents are usually 50-80 pages long, full of legal language, with complex forms embedded within them. Investors are then left to decipher the forms to complete them correctly. 

SS&C’s analysis finds that only about 20%of subscription documents are completed successfully on the first pass using traditional manual methods. This low success rate can be traced to five key challenges or obstacles that are inherent in the process:

The common challenges to increasing the life cycle of investor onboarding are:

• Document complexity—Increases time to complete and chances of mistakes.
• Data completeness—Slows down process, requires back and forth.
• AML collection—Slows down process, increases back and forth requests.
• Signature collection—Entity investors with multiple authorized signatories can delay processing.
• Process transparency—Monitor investor progress without manual follow-ups.

Read Full Blog Post

Phoenix American and WealthForge Announce Partnership to Deliver Straight-Through Processing for Alternative Investments

Phoenix American and WealthForge Announce Partnership to Deliver Straight-Through Processing for Alternative Investments

May 13, 2021 | Phoenix American

Phoenix American, a leading transfer agent and fund administration provider for alternative investments and WealthForge, a registered broker-dealer and developer of a subscription automation platform built to streamline investing in alternatives, have announced an integration partnership to provide a seamless, fully digital purchase process for client funds. The partnership will enable financial advisors to access and subscribe to alternative investment products digitally using WealthForge’s Altigo platform resulting in a complete and active investment record in the Phoenix American transfer agent system, STAR-XMS, with no manual intervention.

Streamlining the Investment Process for Alternative Investments

The partnership for straight-through processing is a key step in advancing the investor and advisor experience of the alternative investment industry. Digitizing and streamlining the investment process accomplishes three important goals: accelerating the purchase of alternative investment products, minimizing the entry and processing errors inherent in paper subscription documents, and enhancing the overall security of making an investment.

Innovation Helping to Scale the Industry

STAR-XMS’s integration with the Altigo platform, achieving end-to-end data connectivity with no paper documents, will represent a competitive advantage for client fund sponsors. Advisors will enjoy simple, transparent and efficient access to alternative investment products. Fully automated straight-through processing will help to scale the alternatives industry by eliminating the factors that discourage wealth managers and investors from considering alternative investments.

“Our goal is to make alternative investments as easy to own as a mutual fund,” said Bill Robbins, CEO at WealthForge. “Integrations with key participants in the investment process like Phoenix American are important steps toward creating a seamless experience and providing additional value to our users.”

Phoenix American, an innovator in the alternatives industry, welcomes the added efficiency of the WealthForge integration. The company’s STAR-XMS transfer agent and administration system centralizes and streamlines back-office functions and data collection to support sales efforts. The integration of STAR-XMS with the Altigo platform, eliminating the need for manual entry of subscription information, further enhances the Phoenix American back-office process.

“Phoenix American supports technological advancements that reduce costs for sponsors, increase efficiency and improve investor and rep adoption of alternative investments,” said Andrew Constantin, Senior Vice President, Operations for Phoenix American. “WealthForge is a great partner for us in reducing operational frictions for alternative investments. The Altigo platform is a technological advancement that simplifies investing and pushes the industry forward.”

About Phoenix American:

Phoenix American provides full-service fund administration, fund accounting, transfer agent and investor services as well as sales and marketing reporting to fund sponsors in the alternative investment industry. The Phoenix American Aviation ABS group provides managing agent and accounting services for asset-backed securitizations specializing in the commercial aviation leasing industry. The company was founded in 1972, has six offices worldwide and is headquartered in San Rafael, CA.

Contact:
David Fisher
309854@email4pr.com 
(310) 621-7822

Inland Investments Selects AIX Platform to Power End-to-End Digital Processing of Alternative Investment Offerings

Inland Investments Selects AIX Platform to Power End-to-End Digital Processing of Alternative Investment Offerings

Alternative investments platform provides seamless point-and-click experience for Inland Investments’ wealth management partners

May 10, 2021

Philadelphia, PA, May 10, 2021 – Alternative Investment Exchange (AIX), the platform making it easy to buy, own, and sell alternative investments, announced that Inland Real Estate Investment Corporation (“Inland Investments”) has selected the AIX platform as one of its electronic platform providers to onboard new funds and streamline its alternative investment processes. Powered by the AIX platform, Inland Investments’ new investing portal offers a more seamless experience to its independent broker-dealer and advisor partners.

As a sponsor of alternative public and private real estate securities, Inland Investments provides opportunities for individuals to invest in a variety of real estate investment solutions. Inland Investments and its affiliates are involved in almost every aspect of commercial real estate and have been proponents of innovation in the alternatives industry. Since inception, it has sponsored 784 real estate investment programs serving more than 490,000 investors across all major commercial real estate sectors.

“Inland Investments remains committed to advancing the client experience for our diverse product offerings. The industry is improving investment processing efficiencies and minimizing tedious paperwork, high NIGO rates, and compliance delays,” explained Phil Graham, EVP Strategic Relations at Inland Securities Corporation, dealer manager for Inland Investments. “We believe AIX and Inland Investments share the same objective – to provide an exceptional end-to-end digital investment experience.”

The AIX platform is an easy-to-use alternative investments system that enables an entirely digital investing experience. By removing the tediousness tied to stacks of paperwork, manual data entry, and reconciliation (and hours wasted on re-keying data), the historical objections across the alternative investing ecosystem have been solved. In addition to addressing inefficiency, AIX helps to de-risk the alternative investing process by incorporating real-time validation of requirements such as AI Insight training status, concentration limits, and state suitability.

“Inland Investments’ deep expertise in alternative investment operations and the flexibility of AIX’s technology platform make it possible to elevate the wealth manager’s investing experience to new levels,” said Brad West, COO of AIX. “We are excited to partner with Inland Investments to offer intuitive, streamlined subscription solutions for its diverse product offerings, which include real estate investment trusts, 1031 exchanges, opportunity zones, and private placements.”

About AIX

Alternative Investment Exchange (AIX) is an end-to-end digital platform purpose-built to improve the processes related to buying, owning, and selling alternative investments. AIX’s technology reduces friction, mitigates risk, and creates value across all alternative investing stakeholder groups – wealth managers, asset managers, custodians, transfer agents, and fund administrators. By evolving beyond documents to make data the connective tissue between alternative investment players, AIX makes it easier to conduct business and accelerate industry growth. For more information, please visit aixplatform.com or LinkedIn: linkedin.com/company/aix-alternative-investment-exchange.

Media Contact:
Mark Tordik
Broadpath
+1 215-644-6503
mtordik@broadpathpr.com

 

Altigo Rolls Out Product Focus Group Effort to Optimize Platform for Users

Altigo Rolls Out Product Focus Group Effort to Optimize Platform for Users

May 6, 2021

WealthForge announced today that Altigo, their electronic order entry and subscription processing platform for alternative investments, is rolling out a series of focus groups designed to capture user feedback to help prioritize feature set development and optimize the platform. A select group of RIA, BD and sponsor users will be invited to participate and help shape the future of the product.

The first session with RIA users kicked off last week with Box Financial, CAVRIA Advisors, Durbin Bennett Wealth Advisors, Insight Investment Advisers, MJP Wealth Advisors and Sera Capital among the initial participants. The Altigo product team outlined upcoming enhancements on the roadmap and gathered real-time feedback around what matters most to RIA users. Features including expanded sort, filter and comparison tools, 3rd party due diligence reports and other integrations, and non-subscription workflows like redemptions, PPM distribution and tracking, and change of address were discussed. The recurring theme emerging from the session is that time savings is key and any features that can abbreviate the investment process are highly beneficial.

“I’m already seeing substantial time and cost savings using the features currently available on the Altigo platform,” said Josh Wright, President at Insight Investment Advisers. “I’m thrilled to be part of this ongoing focus group to help make Altigo even more valuable to advisors and the alts community as a whole.”

The Altigo product team will continue focus group sessions with broker-dealer and sponsor clients in the coming weeks. “It’s vital that we incorporate feedback from all users of the platform to build a best-in-class solution,” said Mat Dellorso, Co-founder at WealthForge. “Our goal is to develop the industry standard platform for investing in alternatives. Our growing community of users is key to deciding what that standard should be.”

If you would like to be considered to participate on the Altigo product focus group, please contact your client success manager or email us at clientsuccess@altigo.io.

Alternative Investment Exchange (AIX) Enhances Digital Alt Investing Platform with Support for On-Going Account Maintenance

Alternative Investment Exchange (AIX) Enhances Digital Alt Investing Platform with Support for On-Going Account Maintenance

New Offering Automates Entire Experience for Advisors, Transfer Agents, Custodians, Asset Manager, and Wealth Managers

March 10, 2021

PHILADELPHIA (March 10, 2021) – Alternative Investment Exchange (AIX), the platform making it easy to buy, own, and sell alternative investments, has added new account maintenance functionality to its digital alternative investment platform. The new AIX account maintenance capability automates maintenance requests, mitigating tedious paperwork and manual processes.

“From day one, the sole purpose of AIX has been to make alternative investments easier to buy, own and sell,” said Joseph P. Ujobai, CEO of AIX. “With the launch of account maintenance functionality to our existing enterprise alts platform, we deliver on that promise by ensuring an efficient, point and click experience for advisors who want to make alternative investments a workable option for their clients’ portfolios.”

While subscribing to alternative investments funds is an arduous process, more effort and paperwork is required to support and maintain those investments over time. Being that owning alts is a long-term strategy, common changes, such as adding new banking information, adjustments to cost basis or distribution method, and basic updates to contact information, can occur dozens of times throughout the lifetime of a single account. Each of these transactions require more paperwork and greater time spent servicing these positions than any other type of asset class.

“By removing the friction associated with both buying and owning alternative investments, advisor exception handling and paperwork can be automated, leading to time savings and improved client experiences,” said Brad West, COO of AIX.

At this week’s Blue Vault Bowman Alts Week 2021, AIX is speaking on the importance of selecting a technology partner that understands the alts business, enables growth, and has the capability to solve for the entire alternative investment lifecycle.

About AIX

Alternative Investment Exchange (AIX) is an end-to-end digital platform purpose-built to improve the processes related to buying, owning, and selling alternative investments. AIX’s technology reduces friction, mitigates risk, and creates value across all alternative investing stakeholder groups – wealth managers, asset managers, custodians, transfer agents, and fund administrators. By evolving beyond documents to make data the connective tissue between alternative investment players, AIX makes it easier to conduct business and accelerate industry growth. For more information, please visit aixplatform.com or LinkedIn: linkedin.com/company/aix-alternative-investment-exchange.

Media Contact:

Mark Tordik
Broadpath
+1 215-644-6503
mtordik@broadpathpr.com

 

 

Altigo Signs Tenth Broker-Dealer Partnership

Altigo Signs Tenth Broker-Dealer Partnership

March 10, 2021

Altigo, an electronic order entry and subscription processing platform for alternative investments, has now hit double digits in its expansion of broker-dealer partnerships. Firms including Benchmark Investments, Coastal Equities, Great Point Capital, Lightpath Securities, and more recently Emerson Equity, Kingswood, and Aurora Securities have chosen Altigo to digitally manage their alternative investments business.

Firms using the platform have seen how Altigo’s intuitive workflow facilitates order entry by integrating home office and custodial forms and providing access to all firm-approved offerings in one online portal, increasing both rep productivity and compliance control.

“I cannot emphasize enough how much Altigo has simplified the purchase application process. If a client is investing in 4 different products, the first purchase agreement can be completed in 10 minutes instead of 30, with subsequent ones in even less time,” said Frank Piscitelli, a registered representative at Archer Investors with Lightpath Securities. “The auto-populating features significantly reduce NIGOs. The time saved provides more time to reach out to present and future clients.”

70% of subscriptions are submitted for acceptance by the sponsor the same day, and every step of the process is trackable in real time. Additionally, reps and compliance officers have peace of mind knowing that Altigo has completed a SOC 2, Type II audit, demonstrating the platform’s commitment to data security

Several firms initially signed up for a pilot program to determine the effectiveness of using Altigo to process their alternative investment business. The program has been a resounding success, concluding with a decision to move forward with a firm-wide rollout to all registered reps. 

“Altigo has demonstrated its ability to make our processes more efficient, making it so much easier to review and approve investments,” said John Neppel, Principal at Great Point Capital. “Implementation of the platform went smoothly and we were thrilled with the speed that new firm-approved offerings were set up. We are eager to roll the platform out to our entire rep base to fully realize Altigo’s potential for our firm.”

Altigo’s growth is poised to continue throughout 2021 with even more features being added. Redtail integration has recently been added, which helps speed up the data entry process for reps and advisors by populating data directly from their CRM. AI Insight integration is also slated for release later this month which will help ensure rep training is complete if it is required by the firm before the package is sent for signature. The remainder of the year will see integrations with additional CRM platforms, custodians, clearing firms, transfer agents and fund admins as well as more product discovery and comparison features in Altigo Marketplace.

Altigo Integrates with Redtail CRM to Further Streamline Alternative Investment Processing

Altigo Integrates with Redtail CRM to Further Streamline Alternative Investment Processing

March 8, 2021

WealthForge announced today that Altigo, their electronic processing platform for alternative investments, now integrates with Redtail, a customer relationship management solution widely used in the financial services industry. The API integration will allow reps and advisors to pre-populate fields in Altigo’s digital order entry process with investor information stored in Redtail, reducing subscription time to as little as 5 minutes. 

“Our goal with Altigo is to make the investment process as seamless as possible. In order to do that we are taking every opportunity we can to remove manual data entry, which is time-consuming and can be prone to errors,” says Bill Robbins, CEO of WealthForge. “By integrating with CRM platforms like Redtail, we’re enabling financial representatives to make alternative investment transactions with unprecedented ease, freeing up more time for them to spend with their clients.”

When users of Redtail initiate a subscription through Altigo, they will be presented with the option to select a client from their CRM in addition to the usual options of drafting a subscription from scratch or copying information from a previously completed investment. The integration further enhances Altigo’s revolutionary process improvements. The platform reduces NIGO (not-in-good-order) error rates from 30-60 percent down to less than 5 percent and boasts investment cycle-times of 2 days, compared to approximately 3 weeks on average using paper processes. 

For more information about Altigo, visit our product page or contact us with any questions.

About WealthForge

WealthForge provides technology solutions developed by experienced regulatory professionals to streamline investments into alternative securities. The company’s electronic investment processing platform, Altigo was built to address common industry roadblocks, enable marketplace connections, and facilitate alternative investment transactions between reps, advisors, product sponsors, custodians and transfer agents. With over a decade of experience processing alternative investments and developing technology solutions, WealthForge has built a reputation as an innovator in the market. 

Alternative Investment Exchange (AIX) and Kalos Financial Partner to Streamline Processes and Advance Alt Investing

Alternative Investment Exchange (AIX) and Kalos Financial Partner to Streamline Processes and Advance Alt Investing

AIX facilitates data connectivity across the Kalos alt investing ecosystem, benefiting wealth managers, product sponsors, custodians, and transfer agents

March 1, 2021

PHILADELPHIA AND ALPHARETTA, GA (March 1, 2021)Alternative Investment Exchange (AIX), the platform making it easy to buy, own, and sell alternative investments, and Kalos Financial (Kalos), a full-service independent financial solution firm pioneering the endowment model for individual investors, are partnering to improve the alt investing experience for financial professionals and their clients.

As an independent broker-dealer, Kalos’ products are meeting and exceeding the needs of its advisors’ clients. Partnering with AIX enables Kalos to greatly streamline its alternative investment transaction process by affording its advisors a point and click experience much the way mutual funds are traded.

“Offering AIX’s cutting-edge platform is the latest example of how Kalos continues to expand our technology offering to help our advisors grow their business and better serve their clients,” said Chrissy Lee, President and COO of Kalos.” AIX provides our advisors with an exceptional, intuitive alt investing experience, while also helping to reduce NIGO issues. We look forward to our continued partnership with AIX.”

Joining Kalos on the AIX platform are many of its sponsors and transfer agency partners. The relationship with Kalos builds upon AIX’s efforts to establish direct data connectivity with multiple transfer agents, including Phoenix American and Great Lakes Fund Solutions, Inc. (Great Lakes).

With Kalos and its partners onboarded, AIX is ensuring a fully paperless process, front-to-back, with no manual intervention that is transforming the way alternative investing is done. Several product sponsors on the Kalos network are now on the AIX platform.

“Through our digital platform, AIX is authentically connecting sponsors, advisors, and wealth managers to create seamless data-driven processes that enhance compliance and reduce friction in the alternatives space,” said Brad West, COO of AIX. “We believe this partnership is a reference point for the industry that underscores how alt business should be done. Further, this increases our network mass whereby, as more custodians, transfer agents, and product sponsors join the platform, increased value is realized by all involved.”

 

About Kalos

Co-founded by finance industry veterans Daniel and Carol Wildermuth, Kalos Financial provides financial solutions through Broker Dealer services and Investment Advisor Services to seasoned, independent, cross-licensed representatives and advisors. Learn more at https://kalosfinancial.com.

 

About AIX

Alternative Investment Exchange (AIX) is an end-to-end digital platform purpose-built to improve the processes related to buying, owning, and selling alternative investments. AIX’s technology reduces friction, mitigates risk, and creates value across all alternative investing stakeholder groups – wealth managers, asset managers, custodians, transfer agents, and fund administrators. By evolving beyond documents to make data the connective tissue between alternative investment players, AIX makes it easier to conduct business and accelerate industry growth. For more information, please visit aixplatform.com or LinkedIn: linkedin.com/company/aix-alternative-investment-exchange.

 

Media Contact: 

Mark Tordik 

Broadpath 

+1 215-644-6503

mtordik@broadpathpr.com

Hamilton Lane Selects UMB Fund Services as Administrator of Firm’s First U.S. Registered Closed-End Fund

Hamilton Lane Selects UMB Fund Services as Administrator of Firm’s First U.S. Registered Closed-End Fund

February 9, 2021

MILWAUKEE (Feb. 9, 2021) – UMB Fund Services, Inc. (UMBFS), a subsidiary of UMB Financial Corporation (Nasdaq: UMBF), is pleased to announce that it has been retained to provide fund administration, accounting, transfer agency, distribution* and custody* services for the Hamilton Lane Private Assets Fund (PAF), which merged from a private to registered product to become the firm’s first U.S. evergreen fund.

“We are pleased to continue providing services to Hamilton Lane following the conversion of the firm’s private fund into a registered product,” said Maureen Quill, executive vice president, executive director of registered funds at UMB Fund Services. “We look forward to supporting the growth of Hamilton Lane’s Private Assets Fund with our expertise as the firm markets the fund to qualified clients.”

Hamilton Lane (NASDAQ: HLNE), founded in Philadelphia in 1991, is a private markets investment management firm providing innovative solutions to sophisticated investors around the world. The PAF broadens accessibility to qualified U.S. investors. Compared to traditional private market offerings, the fund features a lower minimum investment of $50,000 and simple 1099 tax reporting; targets fee-efficient investments; and provides the potential for attractive risk-adjusted returns and limited administrative burden.

“We are pleased to have UMB Fund Services as a key service provider for PAF,” said Fred Shaw, Chief Risk Officer at Hamilton Lane. “UMB Fund Services’ expertise across registered closed-end funds, coupled with their high-touch service, will help us offer the fund to a broader set of U.S. investors seeking access to the private markets.”

UMBFS ranked as the top transfer agency for U.S. registered closed-end funds based on the number of accounts serviced in the 2020 Mutual Fund Service Guide. In 2019, UMBFS was named Best Interval Fund Administrator in the Fund Intelligence Operations and Services Awards.

UMB Fund Services is a subsidiary of UMB Financial Corporation, offering a complete line of products and services to the fund industry, including fund administration, fund accounting, tax, investor services and transfer agency, distribution* and custody*.

About Hamilton Lane:

Hamilton Lane (NASDAQ: HLNE) is a leading alternative investment management firm providing innovative private markets solutions to sophisticated investors around the world. Dedicated to private markets investing for 29 years, the firm currently employs over 400 professionals operating in offices throughout North America, Europe, Asia-Pacific and the Middle East. Hamilton Lane has approximately $657 billion in assets under management and supervision, composed of approximately $76 billion in discretionary assets and approximately $581 billion in advisory assets, as of December 31, 2020.  Hamilton Lane offers a full range of investment products and services that enable clients to participate in the private markets asset class on a global and customized basis. For more information, please visit www.hamiltonlane.com or follow Hamilton Lane on Twitter: @hamilton_lane.

About UMB:

UMB Financial Corporation (Nasdaq: UMBF) is a financial services company headquartered in Kansas City, Missouri. UMB offers commercial banking, which includes comprehensive deposit, lending and investment services, personal banking, which includes wealth management and financial planning services, and institutional banking, which includes asset servicing, corporate trust solutions, investment banking, and healthcare services. UMB operates branches throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas, and serves business and institutional clients nationwide. For more information, visit UMB.com, UMB Blog, UMB Facebook and UMB LinkedIn, or follow us on Twitter at @UMBBank. For information about UMB’s operations, approach and relief measures during the COVID-19 pandemic, please visit https://more.umb.com/covid-info/.

 

*Services provided by UMB Distribution Services, LLC and UMB Bank, n.a.

Carter Multifamily Joins the Alternative Investment Exchange (AIX) Platform

Carter Multifamily Joins the Alternative Investment Exchange (AIX) Platform

Seamless data connectivity and paperless processing enables Carter Multifamily to raise greater capital by providing exceptional experience to allocators

February 3, 2021

Philadelphia, PA, February 3, 2021 – Alternative Investment Exchange (AIX), the platform making it easy to buy, own, and sell alternative investments, has onboarded Carter Multifamily Fund Management Company, LLC (“Carter Multifamily”) to the AIX platform. This integration opens the path for allocators to make Carter Multifamily funds a bigger part of their client portfolios. The successful onboarding was coordinated in tandem with Carter Multifamily and its independent broker-dealer and transfer agent partners.

Carter Multifamily is a private company focused on acquiring multifamily real estate investments that offer value-add enhancement opportunities. When the COVID-19 pandemic struck, it made the traditional paper-based processes associated with buying, owning, and selling alternative investments even more difficult and cumbersome for Carter and its partners. For Carter Multifamily, the pandemic accelerated its path toward adopting an efficient straight-through investment process as it shifted operations virtually.

After meeting with AIX, Carter Multifamily was motivated to digitize its entire process making it easier for partners hindered by labor-intensive paperwork, NIGO (Not in Good Order) errors, and other compliance issues. In working with Carter Multifamily and its partners, AIX conducted a seamless technology integration in a mere five weeks. Carter Multifamily is now up and running on the platform and has started the process of integrating a new fund into the AIX platform.

“At the top level, we wanted our broker-dealer representatives to be able to use the AIX platform to process transactions as painlessly as possible,” explained Lisa Robinson, President of Carter Multifamily. “With the help of AIX, we have empowered our representatives, enabling us to sharpen our focus on raising equity, acquiring assets, and more quickly seizing on available buying opportunities.”

The industry average cycle time for current paper-based processes is approximately six weeks from the time an advisor initiates an order to when clearing and settlement is complete. AIX’s end-to-end straight-through processing can take as little as 72 hours, reducing the time it takes to complete a transaction by 90%. What’s more, the alternatives industry sees paperwork errors, or NIGOs, as high as 50%, according to industry estimates. AIX can deliver NIGOs under 10% — preventing 80% of these issues before they are even submitted for review.

“Processing an order was previously a very laborious and paper-intensive process. Simply put, with AIX, we can bring in capital faster than ever before, and the system has shown to drastically reduce cycle times between advisors and investors,” added Robinson.

Solutions that digitize only account opening and subscription processes by generating digital versions of signed subscription documents remain cumbersome, time-consuming, opaque, and prone to errors. AIX addresses the entire lifecycle, digitally connecting all parties involved and seamlessly transmitting data through respective stakeholders’ systems.

Momentum continues to grow for AIX. Carter Multifamily joins a growing list of forward-thinking investment sponsors available through the AIX platform. “Carter Multifamily’s efforts in making a transformational impact on its business is inspiring and serves as a reference point for the industry,” said Brad West, AIX COO. “With the AIX platform in place, Carter Multifamily is creating better experiences for its investment advisor representatives which will, in turn, help reduce error rates and ultimately see efficiency savings passed back to them and individual investors.”

About AIX:

Alternative Investment Exchange (AIX) is an end-to-end digital platform purpose-built to improve the processes related to buying, owning, and selling alternative investments. AIX’s technology reduces friction, mitigates risk, and creates value across all alternative investing stakeholder groups – wealth managers, asset managers, custodians, transfer agents, and fund administrators. By evolving beyond documents to make data the connective tissue between alternative investment players, AIX makes it easier to conduct business and accelerate industry growth. For more information, please visit aixplatform.com or LinkedIn: linkedin.com/company/aix-alternative-investment-exchange.

Media Contact:
Mark Tordik
Broadpath
+1 215-644-6503
mtordik@broadpathpr.com

Altigo Successfully Completes Independent SOC 2 Type II Audit, Reinforcing Commitment to Data Security

Altigo Successfully Completes Independent SOC 2 Type II Audit, Reinforcing Commitment to Data Security

January 19, 2021 | WealthForge

WealthForge announced today that its electronic investment processing platform, Altigo, has successfully completed an independent SOC 2 Type II audit. As part of the alternative investment subscription process, Altigo captures and transmits sensitive investor data on a daily basis. Because protecting investor data is vitally important, WealthForge instituted a robust cybersecurity program and engaged a licensed CPA firm to review existing data security policies and controls. WealthForge’s auditors reviewed its controls around security, availability, and confidentiality and issued a SOC 2 Type II report in mid-January 2021.

“Data security is a top priority at WealthForge,” says Bill Robbins, CEO of WealthForge. “We wanted to take the extra step with this third-party audit to demonstrate our commitment to protecting the sensitive information that Altigo is designed to capture, providing our clients with an added level of trust in us as a partner.”

An organization that has obtained a SOC 2 Type II report has shown that its system is designed to safeguard the confidential data of its customers. Designed for more advanced technology providers, including SaaS companies, SOC 2 is an audit procedure developed by the American Institute of CPAs to review a service provider’s controls around the security, availability, processing integrity, confidentiality, or privacy of user’s data. This audit conducted by licensed CPAs results in a final report that evaluates an organization’s stated data security policies and controls against its actual practices. There are two types of reports, Type I and Type II. A Type I report is an attestation of controls at a specific point in time, whereas the more rigorous Type II report is an attestation of controls over a period of time. 

Altigo users can rest assured that Altigo’s practices around customer data have been thoroughly audited by an independent third party, and that any findings have been addressed. Altigo will undergo a SOC 2 audit on an annual basis going forward.  

About WealthForge

WealthForge provides technology solutions developed by experienced regulatory professionals to streamline investments into alternative securities. The company’s electronic investment processing platform, Altigo was built to address common industry roadblocks, enable marketplace connections, and facilitate alternative investment transactions between wealth managers and sponsors. With over a decade of experience processing alternative investments and developing technology solutions, WealthForge has built a reputation as an innovator in market. To learn more, visit www.wealthforge.com.

Brian Jones of Envision Financial Systems wins 2020 Nicsa NOVA Strategic Leadership Award

Brian Jones of Envision Financial Systems wins 2020 Nicsa NOVA Strategic Leadership Award

December 18, 2020

(Costa Mesa, Calif., Dec. 17, 2020) – Envision Financial Systems, Inc., a leading provider of real-time investor recordkeeping technology and transfer agency services, is proud to announce that Brian Jones, Executive Vice President, is a winner of the 2020 Nicsa NOVA Strategic Leadership Award.

Nicsa, a trade association with broad-based membership in the investment industry, awards its annual Strategic Leadership Award to one or more winners who have “demonstrated excellence through cutting-edge thought leadership and business solutions with a wide scope of influence across the global asset management industry.”

“Visionary navigation of industry trends requires excellence in thought leadership, exemplary adaptation of evolving fiduciary standards, and a dedication to the advancement of the client experience,” notes Nicsa in award materials. “Strategic Leadership Award winners demonstrate leadership through cutting-edge business solutions with a wide scope of influence across the asset management industry.”

Jones was honored for industry contributions across a 35-year career, including roles at Fidelity Investments and Federated Investors prior to joining Envision in 2004. His nomination highlighted the multiple instances where he has helped organizations modernize investor servicing and communications. At Envision, Jones is responsible for intermediary services, marketing, business development, strategic partnerships, and is part of the executive committee. Jones’ many contributions to Nicsa include six years on its national board of directors, and chair person or member of multiple committees, including the east coast, alternatives, broker dealer and general membership.

“For decades, Brian has been a force for positive change,” said Timothy Kan, Envision’s president and chief strategy officer. “In everything he’s done, Brian has been relentless in keeping the focus on the client experience while also hunting down inefficiencies and redesigning processes to optimize results. All of us at Envision applaud his industry-wide contributions—and are especially glad to have him on our team.”

Read more about the 2020 Nicsa NOVA award program and Nicsa’s news release announcing the winners. Also, view a Nicsa video interview with Jones.

About Envision Financial Systems, Inc.

Founded in 1994, Envision Financial Systems, Inc. is a premier provider of real-time investor recordkeeping technology and outsource solutions. Using in-depth knowledge of the industry and listening to its customers, Envision’s solutions enable firms with subaccounting needs to consolidate and control investor activity, increase representative and investor satisfaction, and help mitigate operational and economic risks. Envision supports over 450 investment companies, comprised of over 16,000 CUSIPS representing over $39 trillion is client assets. Envision’s headquarters are in Costa Mesa, California, with offices in Owings Mills, Maryland, Denver, Colorado and Bangalore, India. For more information, visit www.enfs.com.

Envision’s Lani Oneil Appointed to Nicsa Alternative Investments Committee

Envision’s Lani Oneil Appointed to Nicsa Alternative Investments Committee

December 18, 2020

(Costa Mesa, Calif., Dec. 18, 2020) – Envision Financial Systems, Inc., a leading provider of real-time investor recordkeeping technology and transfer agency services, announced the appointment of Lani Oneil, Vice President of Business Development, to the Nicsa Alternative Investments Committee. Nicsa is a trade group promoting education and operational best practices in the investment management industry.

Nicsa committees are designed to bridge the gap between all facets of the global asset management industry through active member engagement and leadership. The Alternative Investments Committee focuses on industry standardization and best practices between alternative investment product providers, distributors and service firms.

“As a provider of technology solutions for alternative investment sponsors, it is great to have another connection to investment manufacturers and others who support the alternative investments community,” said Oneil. “I look forward to representing Envision and adding value as an engaged committee member.”

Envision is dedicated to expanding within the alternative marketplace. In order to serve a broader range of asset managers and alternative investment administrators, Envision has been focused on increasing its alternative investment solutions. Oneil’s efforts to grow the distribution of the company’s shareholder recordkeeping products and services has been integral to this expansion.

“Lani will be an effective member of the committee thanks to her years of experience and in-depth knowledge of the industry,” said Brian Jones, Executive Vice President of Envision Financial Systems. “We are proud to have her serve as a representative of Envision.”

About Envision Financial Systems, Inc.

Founded in 1994, Envision Financial Systems, Inc. is a premier provider of real-time investor recordkeeping technology and outsource solutions. Using in-depth knowledge of the industry and listening to its customers, Envision’s solutions enable firms with subaccounting needs to consolidate and control investor activity, increase representative and investor satisfaction, and help mitigate operational and economic risks. Envision supports over 450 investment companies, comprised of over 21,555 CUSIPS representing over $39 trillion is client assets.  Envision’s headquarters are in Costa Mesa, California, with offices in Owings Mills, Maryland, Denver, Colorado and Bangalore, India. For more information, visit www.enfs.com.

ICI report on ops headaches for interval fund sponsors flags areas where help is sorely needed, easily found

ICI report on ops headaches for interval fund sponsors flags areas where help is sorely needed, easily found

December 7, 2020 | Tom Wiedecker 

An interesting recent paper from the ICI Broker/Dealer Advisory Committee, “Consider This: Interval Fund Operational Practices,” looks at several functional areas where interval fund sponsors run into operational challenges based on the unique characteristics of these products, which are designed to provide better liquidity than many alternative investments through a periodic share repurchase program. The paper considered Methods of Trading, Scheduling Repurchases and Subscription Periods, Communication, Trade Corrections, Share Class Conversions, and Distribution Processing and does a great job laying out the operational issues raised by interval funds for each activity.

The challenges are striking and they speak to the need for sponsors to seek the greatest flexibility possible when creating a shareholder accounting and servicing function. Looking at each of the seven functional areas addressed by the ICI report, a couple were especially frustrating for someone who spends their time working with forward looking investment organizations to develop technology solutions to simplify and optimize their shareholder accounting processes.

Methods of Trading

Intermediaries, the main engine for interval fund distribution, don’t have a standardized trading method for the products. The most popular platforms are DTCC’s Alternative Investment Product (AIP) platform and NSCC’s Fund/SERV.

The ICI notes that many accounting systems used by funds and intermediaries integrate with one or the other, but not both and, “as a result, interval funds traded through Fund/SERV may not be able to be easily distributed by intermediaries that are only integrated with AIP for interval funds, and vice versa.”

To overcome that hurdle, the report indicates that some sponsors have built parallel functionality to support their interval funds on both platforms, requiring them to duplicate all fund-level activities and to merge trading and reporting activities from the two platforms back into their own operations. To complicate matters, the two platforms feature different settlement processes with different schedules.

So an interval fund sponsor’s options essentially boil down to cobbling together a kludgy, duplicative approach to trading or ignoring roughly half of the most important distribution channel.

That’s no way to run a railroad! Sponsors need a multilingual shareholder accounting system that is fluent in both AIP and Fund/SERV right out of the gate.

Scheduling Repurchase (and Subscription) Periods

The report also highlighted the practical challenges Interval fund sponsors face managing their defining feature—the regular offer to buy back shares from shareholders. Strict rules govern the subscription period and subsequent processing dates when shares are transacted and shareholder accounts updated. The report stresses the imperative for any accounting system to allow trades entered during the interval period to be processed and disallow them outside that window.

The ICI whitepaper also highlights the challenges of accurately communicating the interval status within the sponsor organization and to the broader distribution network.  This coordination can be especially difficult when holidays adjacent to the event come into play because sponsors tend to be short-staffed during holiday periods.

These special scheduling challenges associated with interval funds suggest that a shareholder accounting system supporting them needs to be rule based, automated and capable of communicating accurately with all stakeholders (and, ideally, with the systems supporting other products on the sponsor’s platform, including ‘40 Act funds).

Trade corrections

According the ICI report, “Interval fund trade corrections identified outside a repurchase or periodic subscription process date may have significant legal, operational, and portfolio ramifications for related transactions. As a result, those corrections may be restricted, limited, or denied. This leaves the intermediary and its related shareholder(s) subject to market risk and a less-than-ideal client experience.”

Any corrections should be memorialized via a sound audit trail.  This can be quite a challenge in cases where records are maintained via spreadsheets or processes not supported with appropriate checks and balances.   A shareholder accounting system for interval funds, where the inability to quickly correct an error can have serious economic and reputational consequences, needs to be nimble and relational so that the correction can be confidently and accurately applied.

Conclusion 

Executing trades, accurately adhering to the calendar and correcting errors are just three of the trouble areas highlighted in the ICI’s recent report. It was more than a little traumatic to read the whole thing and be reminded of all the headaches interval fund sponsors deal with every day as they cobble together their own solutions for administering these fascinating, but operationally cumbersome, products.

Why go it alone? We’ve been working with fund sponsors for more than 25 years and have already solved many of the operational challenges the ICI report outlines.  Further, we can help craft agile, integrated solutions for the full array of traditional and alternative products. Even those that trade at intervals.

This article was originally published in The DIWire.

Bow River Capital Selects UMB Fund Services as Administrator of Firm’s First Registered Closed End Interval Fund

Bow River Capital Selects UMB Fund Services as Administrator of Firm’s First Registered Closed End Interval Fund

January 7, 2021

MILWAUKEE (Jan. 7, 2021) – UMB Fund Services (UMBFS), a subsidiary of UMB Financial Corporation (Nasdaq: UMBF), is pleased to announce that it has been retained to provide fund administration services for Bow River Capital’s Evergreen Fund. The Bow River Capital Evergreen Fund is the firm’s first registered product.

“We are pleased to evolve our relationship with Bow River following the conversion of its private equity fund into a registered fund,” said Maureen Quill, executive vice president, executive director of registered funds at UMB Fund Services. “We look forward to supporting Bow River’s continued growth with our high-touch client service and expertise in all facets of registered fund administration.”

The partnership expands Bow River’s relationship with UMB Financial Corporation. UMB Bank, n.a., a subsidiary of UMB Financial Corporation, has provided a subscription line of credit and serves as trustee for Bow River Capital Real Estate Fund II. The bank also financed real estate assets held in the fund and currently maintains deposits for the fund.

As one of Denver’s largest private alternative asset management companies, Bow River is continuing to expand its investment focus in the lower middle market in three asset classes, including private equity, real estate and software growth equity.

“We are excited to partner with UMB Fund Services for fund administration of the Bow River Capital Evergreen Fund,” said Jeremy Held, managing director at Bow River. “We feel confident UMB Fund Services is the best fit to provide personalized service and embrace our commitment to offering a unique private equity solution to a wider investor base.”

UMBFS has been servicing registered investments for decades and the partnership with Bow River adds to its continued growth in the registered private equity fund space.

UMBFS also ranked as the top transfer agency for U.S. registered closed end funds based on the number of accounts serviced in the 2020 Mutual Fund Service Guide. In 2019, UMBFS was named Best Interval Fund Administrator in the Fund Intelligence Operations and Services Awards.

UMB Fund Services is a subsidiary of UMB Financial Corporation, offering a complete line of products and services to the fund industry, including fund administration, fund accounting, tax, investor services, and transfer agency, distribution* and custody*.

About Bow River Capital:

Founded in 2003, Bow River Capital is a private alternative asset management company based in Denver, Colorado, with Buyout, Real Estate, and Software Growth Equity platforms. The Bow River Capital funds focus on the lower middle market across a geographic area referred to as Bow River Capital’s Rodeo Region®, which encompasses the Rocky Mountains and surrounding states. Collectively, Bow River Capital has deployed capital into diverse industries, asset classes, and across the capital structure.

About UMB:

UMB Financial Corporation (Nasdaq: UMBF) is a financial services company headquartered in Kansas City, Missouri. UMB offers commercial banking, which includes comprehensive deposit, lending, and investment services, personal banking, which includes wealth management and financial planning services, and institutional banking, which includes asset servicing, corporate trust solutions, investment banking, and healthcare services. UMB operates branches throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona, and Texas, and serves business and institutional clients nationwide. For more information, visit UMB.com, UMB Blog, UMB Facebook, and UMB LinkedIn, or follow us on Twitter at @UMBBank. For information about UMB’s operations, approach, and relief measures during the COVID-19 pandemic, please visit https://more.umb.com/covid-info/.

*Services provided by UMB Distribution Services, LLC and UMB Bank, n.a.

Altigo Year in Review

Altigo Year in Review

December 21, 2020 | Heather Acey | WealthForge

With the arrival of the pandemic, 2020 brought a substantial shift in the way business is conducted. Firms that allocate to alts had figure out a new way to get paper-based subscription documents to clients for signature, then routed from there to the other parties involved.This ushered in a sweeping change in the alts industry—electronic processing for alternative investments went from a nice to have, to a necessity.

Our alternative investment platform, Altigo, has enabled sponsors, reps and advisors to continue to conduct their alts business electronically in today’s remote work environment. Being well-positioned to meet the growing need for paperless solutions in alternative investments, Altigo experienced tremendous growth throughout the year. First announced in mid-2019, $200 million in transactions representing 600 subscriptions have been submitted through the platform. Altigo currently supports nearly 100 offerings spanning a range of alternative investment products—such as 1031 Exchange DSTs, Non-Traded REITs, Qualified Opportunity Zone Funds, and BDCs— with 40 new offerings added to the platform just last quarter.

The alternative investment offerings available on Altigo represent 50 well-known sponsors including Inland, Bluerock, Cantor Fitzgerald, Capital Square, Greenbacker, and more. While Altigo began with alternative product sponsors in mind, the platform matured over the past year to include a robust feature set designed specifically for BD firms. Most notably, broker-dealers can now provide reps with access to all firm-approved offerings in one place, which facilitates increased rep productivity and compliance control. This ease of use has attracted seven new broker-dealers to the platform this year, including Coastal Equities, Colorado Financial Services, Emerson Equity, Great Point Capital and Lightpath Capital.

Read Full Blog Post

 

How FAs win by going all in with automation: A Blue Vault Webinar Recap

How FAs win by going all in with automation: A Blue Vault Webinar Recap

November 15, 2020

“Water seeks its own level,” said Envision Executive, Brian Jones. “If you’re not offering a robust digital experience—for advisors and investors—they’re going to complain and go somewhere else.”

Jones was speaking at a recent panel hosted by Blue Vault where he was joined by executives from CNB Custody and Wealthforge for a discussion of the benefits to financial advisors of automating shareholder operations associated with alternative investment products as well as the obstacles that may be preventing them from doing so.

Jones told the audience that many organizations he meets with still rely on manual processes for alternative products and use tools such as spreadsheets that are not well suited for the job. He recommended investment sponsors conduct an audit of their processes to gauge how much time and money is spent on tasks that could be automated.

He described a firm Envision helped with such an exercise where new account onboarding takes two hours, distributions take a full week of staff time and the quarterly statement process is a two-week undertaking. (That two-hour estimate for opening new accounts tracked with a snap poll of the audience that indicated the process takes 2-4 hours).

Any evaluation of back office processes, Jones added, should also consider another cost: The business, financial and reputational risk that comes with errors. He said that with manual processing, not-in-good-order rates for alternative investment products (the audience’s number one frustration, according to another snap poll question) can be as high as 40% and the mistakes can take several weeks to cure. “With automated onboarding, those NIGO rates can be brought down to single digits and with a lot less turnaround time,” Jones said.

Robust advisor attendance at the virtual panel, and another flash poll audience question, suggested a high degree of advisor interest in automation. Asked whether automation of alternative investment processes is a priority in the next six months, two-thirds of the attendees said “yes.”

So, what’s holding back greater adoption of automated shareholder processes? The audience poll indicated many advisors believe their customers “aren’t comfortable with electronic signatures or processes.” But Jones suggested that one beneficial upshot of the pandemic may be that advisors and their customers become more open to new ways of doing things. “COVID itself is going to cause people to make some changes to their processes,” he said. “For example, who wants to run to the bank to get a medallion [signature guarantee] anymore?”

Alternative Investment Exchange (AIX) Hires Michelle Browning as Director of Sales

Alternative Investment Exchange (AIX) Hires Michelle Browning as Director of Sales

Fast growing technology platform adds veteran industry sales resource

November 17, 2020 | Alternative Investment Exchange

PHILADELPHIA, Nov. 17, 2020 /PRNewswire/ — Alternative Investment Exchange (AIX), a financial technology solutions provider that streamlines the process of transacting in non-traded alternatives, hired Michelle Browning as Director of Sales. Browning will be responsible for securing new relationships with product sponsors, broker dealers and other investment advisors.

Michelle brings with her deep financial services experience with roles at Merrill Lynch, ATEL Capital Group, W. P. Carey Inc. and most recently National Sales at AI Insight. Her career expertise is rooted in managing solid relationships across the entire eco-system of wire-houses, custodians, broker dealers, transfer agents and advisors.

It was Browning’s recent role at AI Insight where her alternatives expertise and penchant for financial technology truly came together. AI Insight partnered with AIX to provide real-time integration to broker dealers, whereby advisor’s training certification programs and processes were immediately reflected inside the investment process making the alternative investment compliance process more efficient and transparent for the home office.

Browning said, “I have been in every wholesaler and national account manager’s shoes and know how complex selling alternative investments can be. With all the paperwork involved in the process, so much could go wrong. When I learned AIX wasn’t rekeying in PDFs that must be mailed, imaged or passed from party to party and was making it more efficient for the advisor, broker dealer, sponsor, custodian, transfer agent and clearing firm to process alternative investment transactions by leveraging pure data and no paper it was music to my ears.”

“We are thrilled to add Michelle’s deep expertise to our sales team. As a firm, we have significant momentum and we’re excited to have Michelle help us take our growth to the next level,” said Brad West, AIX COO.

About AIX:

Alternative Investment Exchange (AIX) is a leading enterprise platform that simplifies buying, owning and selling alternative investments – transforming the business model and empowering growth by connecting data. AIX’s technology helps wealth and asset managers use business intelligence to manage risk, drive efficiency and improve advisor and investor experiences. Thousands of wealth advisors rely on AIX to support their business. AIX employs over 30 people and is based in the Philadelphia Navy Yard. For more information, please visit aixplatform.com.

 

Altigo Automates Custodian Documents for Alternative Investments

Altigo Automates Custodian Documents for Alternative Investments

November 11, 2020 

WealthForge announced today that Altigo, their electronic processing platform for alternative investments, has added automation for custodian forms. Users of Altigo will be able to select from custodians including Pershing, RBC Wealth Management, Equity Trust Company, Mainstar Trust, Millennium Trust, NuView Trust, Vantage, and CNB Custody, with support for more custodians coming soon. With custodian document support, Altigo saves users from having to compile documents from several sources, use more than one tech system, or inconvenience their clients with multiple mailings and follow-up requests.

“Custodians are a key participant in the alternative investment ecosystem. But paper documents and medallion wetsignature guarantees present a bottleneck in achieving more efficient processing of alternative investments,” says Bill Robbins, CEO of WealthForge. “We are working with forward-thinking custodians to automate the process, taking the industry another step past simple subscription automation and toward full straight-through processing.”

With Altigo, reps and advisors can select the investment, client, and custodian during the online order entry process, which will automatically pull in required forms such as letters of authorization or direction of investment in addition to the standard subscription agreement and home office-required documents. These forms will be pre-populated with information collected during order entry and compiled into a single subscription package that is automatically sent to clients for electronic signature and to the custodian, sponsor, and financial services firm for completion.

Custodians understand the need for automation and are working with their advisor clients and technology providers like WealthForge to innovate:

“A collaborative approach to solving the clunky, irritating and paper-intensive process is essential in eliminating the primary constraint causing unnecessary friction throughout the alternative investment industry. By synchronizing a united effort, we are on the verge of the long awaited disruptive digital transformation that will continue to fuel the rise of private market investor adoption,” says J.P. Dahdah, Founder & CEO of Vantage.

“Custodians play an integral role when it comes to automation. We have to work together to standardize the operational process and accept digital transactions and electronic signatures for alternative investments,” says Michelle Thomas, VP of Marketing and Business Development at CNB.

“Mandating physical copies of investment documents isn’t feasible in today’s work-from home environment, and won’t be the norm going forward. It’s our job to not only make advisors and reps jobs easier by holding the types of investments they use, but also by helping to create a more seamless process,” says Jean Meyer, President at Mainstar Trust.

With the addition of custodian support to Altigo, WealthForge continues its quest to provide the most flexible and intuitive solution for conducting alternative investments. With features like the transaction activity dashboard, electronic signature and the ability to pull investor data from an integrated CRM or previously completed investment into a new subscription, Altigo is designed to enable remote work and create productivity improvements and operational efficiencies that increase transaction speed and client satisfaction.

Inland Investments Adds Altigo to Support Electronic Processing of Alternative Investment Products

Inland Investments Adds Altigo to Support Electronic Processing of Alternative Investment Products

October 13, 2020

Richmond, VA — WealthForge announced today that they have signed an agreement with Inland Real Estate Investment Corporation (“Inland Investments”), one of the nation’s largest sponsors of alternative public and private real estate securities and a part of The Inland Real Estate Group of Companies, Inc. (“Inland”), to utilize Altigo, WealthForge’s electronic processing technology. In 2019, Inland entities collectively raised more than $1.2 billion of capital through their wholesale distribution company, Inland Securities Corporation.

Inland Private Capital Corporation (“IPC”), a subsidiary of Inland Investments and the industry leading securitized 1031 exchange sponsor offering multiple-owner, tax-focused, private placement investments as well as Qualified Opportunity Zone investments throughout the U.S., will leverage Altigo to support its initiative to digitally process its alternative investment product offerings.

“Creating a more investor-centric experience through the use of electronic investment processing is where the industry is headed—and quickly. We’re committed to being at the forefront of this innovation for both our distribution partners and our investors,” says Keith Lampi, president and chief operating officer of IPC.

With the addition of Inland Investments’ programs, Altigo now represents more than 80% of the entire securitized 1031 market by volume based on 2019 raise amounts of sponsors on the platform. This number speaks to an overall trend of increasing adoption of Altigo since its release a little over a year ago. During that time $150 million has been transacted through the platform and agreements have been signed with several other sponsors and independent broker-dealer firms, expanding both its product availability and user-base.

“The alternative investments market can’t reach its full potential until there is wide adoption of technology across the industry. It takes leaders like Inland Investments to break down barriers and show what is possible in terms of efficiency and scalability. We are excited to be working with such an innovative group,” says Bill Robbins, CEO of WealthForge.

Altigo enables broker-dealer and RIA firms to digitally access and assist their clients in subscribing to alternative investment products from sponsors like Inland Investments via an intuitive online platform. Features like the transaction-activity dashboard, electronic signature and the ability to pull investor data from an integrated CRM or previously completed investment into a new subscription are designed to create productivity improvements and operational efficiencies, speeding up the process and saving money for both wealth managers and sponsors alike.

 

About Inland Real Estate Investment Corporation and The Inland Real Estate Group of Companies, Inc.

Inland Real Estate Investment Corporation is a sponsor of real estate securities and a part of The Inland Real Estate Group of Companies, Inc. The Inland Real Estate Group of Companies, Inc., headquartered in Oak Brook, Illinois, is one of the nation’s largest commercial real estate and finance groups, engaged for more than 50 years in the diverse facets of real estate such as property management, leasing, marketing, acquisition, real estate brokerage, development, redevelopment, construction, real estate financing and other related services. The Inland Real Estate Group of Companies, Inc. is comprised of independent legal entities, some of which may be affiliates, share some common ownership or have been sponsored and managed by such entities or subsidiaries thereof. The Inland name and logo are registered trademarks being used under license. For more information, visit www.inland-investments.com.

 

About Inland Private Capital Corporation

Inland Private Capital Corporation (IPC), headquartered in Oak Brook, IL, is a privately held, industry-leading alternative investment management firm, with an investment focus spanning across a broad range of asset types. As of June 30, 2020, the firm had sponsored 259 private placement real estate offerings, with investments and developments in the multifamily, self-storage, hospitality, healthcare, student housing, retail, corporate office, senior living, and industrial sectors. Many of IPC’s offerings have been designed for investors seeking replacement property to complete an IRS Section 1031 exchange. IPC is recognized as the largest provider of securitized 1031 exchange opportunities in the country, with assets under management (AUM) of more than $8 billion, which includes a diverse national footprint of properties, spanning 43 states across various sectors.

 

About WealthForge

WealthForge provides technology solutions developed by experienced regulatory professionals to streamline investments into alternative securities. The company’s electronic investment processing platform, Altigo was built to address common industry roadblocks, enable marketplace connections, and facilitate alternative investment transactions between wealth managers and sponsors. With over a decade of experience processing alternative investments and developing technology solutions, WealthForge has built a reputation as an innovator in market. To learn more, visit www.wealthforge.com.

AIX Is Transforming the Alternative Investment Process by Changing the Game

AIX Is Transforming the Alternative Investment Process by Changing the Game

October 12, 2020 | James Sprow | Blue Vault

Blue Vault recently discussed with Brad West, COO at AIX Alternative Investment Exchange (“AIX”), how AIX is taking on the challenges that have been long-standing barriers to growth for the alternative investment industry. Since the industry began, it has been handicapped by the tedious paperwork and compliance issues that have plagued financial advisors who have wanted to utilize alternatives in their client portfolios. Not only has the advisor had to clear regulatory hurdles to sell investments in alternatives, but their broker dealers have also had to assure that all transactions have met business policies and state suitability rules. Paper-based transactions have taken up to eight weeks to complete with very high “not in good order” or “NIGO” rates requiring time-consuming reviews and reworking of paperwork.

Recognizing the potential for utilizing technology to create a solution that enables the operational, legal, and regulatory dimensions for all industry stakeholders, AIX’s data-driven, network-effect strategy is paying off.

Moving the Needle Requires Solving the Right Problems

Everyone knows that 100+ page PDFs and high error rates are a problem. There have been many attempts to address these issues with form filling tools and e-signature solutions that create marginal gains but don’t seem to really move the needle. So, we have to ask ourselves, why?

AIX believes the answer lies in how you choose to define the problem. Yes, lengthy documents layered with business rules so complex it would take a tax accountant to decipher them, let alone your every-day investor, are a problem. But according to West, these are just symptoms of a deeper issue.

“You hear a lot about the pain and friction associated with alternative investments being tied to ‘NIGO’ rates and long cycle times. But to address these surface-level issues you have to really dig deep to identify the root cause.” 

That is exactly where AIX started. Brad continues, “Over four years ago, before AIX was launched, we set out with a simple objective. We knew first-hand how hard it is to do business in alts and so we wanted to make it easy. Not only easy to buy alternatives, but also to own and to sell.” This meant taking an inside-out approach and spending countless hours with distribution firms and intermediaries to understand how the work gets done and what would need to change. West credits this process and the knowledge shared by industry stakeholders as foundational to the way the team approached building the technology.

Where Do You Start When You Want to Change the Way an Industry Works?

The obvious answer, according to West, is the advisor-facing subscription experience. As a whole, the industry wants to see growth, and that is achieved through new business. The subscription process as we’ve known it has quite literally been “death by a thousand papercuts,” thanks to endless amounts of paper and manual processing. While AIX has embraced the advisor experience as a cornerstone of their solution strategy, that can’t be the end of the story. “If all we did was make it easier to pre-fill a PDF, sign electronically, and called it a day, we haven’t helped anyone in a meaningful way. In fact, one could argue that it actually exposes firms to greater risk by flooding operations and compliance teams with more paperwork.”

To truly address the pain points and friction tied to subscriptions, you have to solve for the entire processing lifecycle. And accomplishing front-to-back automation can only be done through the transmission of clean data. Not paper or PDFs.

Knowing that data was imperative from the very outset, AIX engaged each industry stakeholder to understand and shape a solution together that could facilitate the movement of data from advisor to client to broker dealer to custodian to sponsor or fund administrator.

Not All Connectivity Is the Same. AIX Changed That.

Brad West continues, “The alternative investment industry is not a ‘straight line’ with a single ‘happy path’ for doing business. AIX has been highly intentional in creating the most robust network of connected transfer agents and supported clearing and custodian firms. Each Transfer Agent, Custodian, Wealth Manager, and Sponsor is different.  We embrace the differences and allow each party to do business their way.  When you look beyond PDF form filling and electronic signature – the way alternative investment business is done has not materially changed in the past several years because the core issues have not been addressed.  That is why we are here – to do the hard work of connecting through data, enabling workflow, and committing ourselves to growing the industry and meeting the needs of each stakeholder.”

To fully leverage the benefit of these data connections, AIX has developed a configurable workflow that allows each party to use their own operational and compliance policies.  The AIX platform conforms to the way each party does business and enforces compliance – not requiring partner firms to change the way they do business because of technology limitations, or requiring AIX’s network partners to pay exorbitant custom development fees to accommodate their policies.  Tailored workflow coupled with true data connectivity is creating a transformational impact and authentically removing the friction.

Setting a New Standard with Industry Support

According to West, “We invite the challenges and are happy to improve them because we know it is the only way a meaningful business outcome can be provided. AIX, as the technology player, knows that investing in the right technology solution reduces expenses associated with paper processes, NIGOs, compliance de-risking, and other costs of reconciling transactions at the home office. Besides cost reductions in all these areas, there is significant risk reduction. In addition to new business and subscriptions, we are managing the full lifecycle of the investment – overcoming each challenge that has limited growth for the industry.”  The result will be more wealth advisors allocating to alternatives because the process will be much less tedious.

West foresees a higher level of adoption and allocation to alternative investments for wealth managers.  By fundamentally removing the friction and delivering a higher quality experience, lower cost, and reduced risk, we aim to remove each obstacle that has limited the growth of the industry.  Ultimately, success is about “growing the pie.”

In today’s very unique market conditions, many wealth managers have been unable to transact in the alternatives sector. As we come to the other side of these conditions, AIX expects to see an uptick in capital raise. As it becomes easier to do business, the home office will want more sponsors to onboard. AIX is working through a change management exercise where habits have been formed over decades due to the absence of technology.  To unlock the potential of technology, there needs to be an investment in the process of showing people how the AIX system streamlines the investment experience for people to understand the benefits. As a result, they are seeing increasing adoption and the excitement that comes with it.

Built to Help Business Pivot During a Pandemic

The pandemic has no doubt accelerated the priority for firms to implement digital solutions. As a result, AIX works very closely with the broker dealers to be very hands-on and deeply involved with the home office. For the BD this is a huge competitive advantage that differentiates them from the market, which becomes an attractive tool for the BD to get more advisors and improve advisor retention.

AIX puts a lot of energy into the home office experience.  Effectively in the BD world, there are multiple steps of approval in the home office, and then the PDF documents have to get out to transfer agents and custodians. AIX is getting a huge lift from the home office people, getting rid of the paperwork, opening up their workflows. In the COVID environment, there is a major health risk in the paper processes, and the AIX system can be used anywhere with internet access. The pandemic has made the paper process more cumbersome and almost impossible to do remotely, accelerating the trend toward digital solutions. AIX has always known that the manual processes of the alternatives investments industry had to change, but they never could have imagined a benefit would be for this reason, at this scale for their clients.

One way that AIX has reduced the risk in the compliance process is through their strategic relationship with AI Insight.  Through this connection, an advisor’s firm can immediately see if the required training and certification have been completed for any type of alternative investment on a ticket. The time required for compliance monitoring can be reduced from hours to seconds. 

Conclusions and Future Possibilities

Blue Vault concluded our conversation with Brad West by discussing what’s next. For AIX this means rolling out solutions that their industry partners are strongly advocating for. This includes the commercial launch of account servicing and maintenance capabilities later this year, to be followed shortly thereafter by repurchasing workflows.

It appears that the technology solutions that AIX has built have tremendous potential to literally revolutionize the alternative investment industry, from sale to holding, to reporting, to liquidations, and therefore, change the game.  For a company that has only been around for less than two years, AIX has already created an inter-connected network among all the players that has huge potential for improved efficiency, cost reductions, and de-risking the alternative investment process.

When all industry players move to a foundation built on data, not paper or PDFs, everything becomes possible.

 

Source:  Interview with Brad West, COO at AIX

How Will the Newly Expanded Accredited Investor Definition Affect Wealth Managers?

How Will the Newly Expanded Accredited Investor Definition Affect Wealth Managers?

September 8, 2020 | Mat Dellorso | WealthForge

On August 26th, 2020, the SEC amended the definition of accredited investor, an identifier of individuals and entities that are eligible to invest in certain restricted alternative investments such as private real estate funds and other investments under Regulation D. The previous rules, which defined accredited investors based on net worth and/or income, had not been updated since they were instated in 1983. Since then, numerous technological and regulatory changes have taken place, altering the investment landscape in the process and necessitating a fresh look at the rule.

The updated definition contains numerous expansions, such as the inclusion of entities like Native American tribes, limited liability companies, and family offices with at least $5 million in assets under management. But for the purposes of financial advisors and registered representatives wondering how the new rule will affect them and their current and potential investor clients, here are some key takeaways:

• Individuals who hold a Series 7, Series 65, or Series 82 license are now considered accredited, regardless of net worth.
• Individuals who are “knowledgeable employees” of a fund can be considered accredited investors for the purposes of investing in that fund.
• The requirements for married or “joint” investors has been expanded to include “spousal equivalents,” which applies to those who are in a co-habitating relationship outside of marriage.

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Blue Creek selects SS&C platform to automate investment processes

Blue Creek selects SS&C platform to automate investment processes

September 21, 2020 | Rebecca Delaney | Asset Servicing Times

Investment manager Blue Creek Capital Management has launched its operations on SS&C Technologies’ cloud-based front-to-back office platform Eze Eclipse.The platform was selected to automate Blue Creek’s investment processes for its China-focused fund.

Eze Eclipse provides market data, electronic trading connectivity, real-time exposure, profit and loss monitoring, and historical performance reporting through a browser experience.

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Phoenix American Announces New Client Partnership With New York City-Based Time Equities, Inc.

Phoenix American Announces New Client Partnership With New York City-Based Time Equities, Inc.

September 28, 2020

SAN RAFAEL, CA – Phoenix American, a leading fund administration provider, is pleased to announce its new client partnership with New York-based real estate investment and development firm, Time Equities Inc. (“TEI”). Phoenix American will fulfill the back-office operational needs of TEI with its industry-leading investor services platform featuring the state-of-the-art STAR-XMS shareholder management / transfer agent system. TEI will benefit from Phoenix American’s combination of advanced technology, partner-oriented client service and long experience with the unique operational requirements of alternative investment funds.

With the growing variety and sophistication of alternative investment funds and the increasing demands of both investors and regulators, advanced operational solutions are critical to the success of today’s fund sponsors. Phoenix American has combined the most efficient systems and precision back-office processes in alternative investments since its origins as a fund sponsor in 1972. Phoenix American’s industry-leading STAR-XMS transfer agent system is the result of the company’s direct experience as a fund sponsor as well as decades of experience as an administrator for alternative investment funds.

“We are always striving to provide the best client service possible to our investors, while at the same time managing the steady growth of our funds and investor base,” said David Becker, Senior Managing Director of TEI’s Equity Department and Member of the TEI Executive Advisory Board. “Having additional administrative support from Phoenix American enables us to keep our primary focus on sourcing assets to acquire with which to provide maximum value to our investors.”

“Time Equities is a venerable fund sponsor with a long history of success in commercial real estate,” said Andrew Constantin, Senior Vice President, Operations for Phoenix American. “We are delighted that TEI has embraced the synergies of our two companies. Our technology and investor services platform are a great fit for TEI. We look forward to working together.”

About Phoenix American

Phoenix American Financial Services, Inc. provides back-office outsourcing services including fund administration, fund accounting, investor services and sales and marketing reporting for management firms in the alternative investment industry. The Phoenix American aircraft group, including its Irish subsidiary, PAFS Ireland Ltd, provides managing agent services for asset-backed securitizations (ABS) in the commercial aircraft and engine leasing industry. Phoenix is an affiliate of Phoenix American Incorporated along with Phoenix American SalesFocus Solutions. Phoenix American has five offices worldwide, was founded in 1972 and is headquartered in San Rafael, CA.

About Time Equities, Inc.

Founded in 1966, Time Equities, Inc. (“TEI”) has been in the real estate investment, development, and asset and property management business for more than 50 years. TEI currently holds in its own portfolio approximately 33.6 million square feet of residential, industrial, office and retail property, including about 5,000 multi-family apartment units, approximately 800,000 square feet in pending acquisitions, and 1.1 million square feet of various property types in stages of pre-development and development. With properties in 33 states, 5 Canadian provinces, Anguilla, Germany, Italy and the Netherlands, the TEI portfolio benefits from a diversity of property types, sizes and markets. There are concentrations in the Northeast, Southeast, Midwest and West Coast of the U.S., and new markets around the world are always being evaluated.