Source: Alternatives Watch
Indianapolis-headquartered Proteus Capital has been steadily building connections between alternative investment managers and investors that have long sought access to more sophisticated investment strategies such as private equity, hedge funds, infrastructure and real estate.
Proteus CEO and CIO Eric Knauss expects the platform to swell to between $400 million and $500 million by year-end.
“We don’t see this market dislocation having a negative impact, but could be an impetus,” said Knauss of the platform’s growth potential.
The platform currently totals 32 top tier private/alternative funds, including Greenspring Associates funds of funds. The alternative funds on the platform can be accessed by both qualified purchasers and accredited investors through a single sign-on to the Proteus platform. Minimums are as low as $50,000 and $100,000, according to platform marketing documents.
For managers on the platform, it allows them greater access to HNW and family office allocators. Also, within their funds it does away with the slot limitations on private funds as the assets are pooled on the platform. Last, but not least, managers can lean on Proteus to handle all back office, valuation, accounting and reporting.
For its part, Proteus itself is a registered investment adviser and in this role has a fiduciary responsibility to the investor. But the platform provider also describes itself as a technology firm too. With a single subscription, investors too have numerous options, including analytics, sourcing, due diligence, portfolio construction and management tools.
While Proteus can legitimately call itself a technology company, an administrator in addition to being RIA, the firm ultimately sees itself as the solution that encourages investors of varying sizes and sophistication the ability to allocate to a broadening number of alternative investment opportunities.
The platform’s unique use of parallel feeders of onshore and offshore master feeder structures alongside sophisticated technology is gaining traction among family offices and RIAs eager for a slice of the alternatives pie.
Proteus was actually launched in 2014. Marketing only ramped up this past summer as investor appetite for ways to diversify away from high correlations with mainstream markets.
Archway Technology Partners was founded in 2002 as a software as a service offering used by family offices, hedge funds, private equity funds for general ledger, partnership accounting, data aggregation and performance measurement. Four years later Archway Technology Partners spun out its fund administration capabilities to form a separate administrator named AFO, which works with hedge funds, private equity and other alternative investments.
In 2017, Archway and AFO were acquired by SEI Investments. At the time of acquisition, Archway’s technology was used by over 200 of the wealthiest family offices in the United States representing in excess of $300 billion in net worth.
In addition, nine of the largest fifteen global private banks rely on Archway’s technology. Also, at the time of acquisition, the adminstrator AFO had over $50 billion in assets under administration.
Knauss, while working at a large private bank, recalls meeting Archway founder Jason Brown in 2012. Brown, who is now a strategic adviser in SEI’s family office services unit, previously founded a hedge fund business named The Pioneer Group, where he developed the groundwork for the original Archway platform.
Knauss said he knew right away that the construction of a platform built by Proteus would be a game changer.
In markets such as these and rising panic levels, Knauss views it all as a contrarian’s friend. The platform has expanded from its initial friends and family base and last October formed a partnership with Callan Associates.
Callan provides alternatives due diligence expertise to Proteus’ platform to streamline the approval of funds available. Knauss said that Callan’s research strengthens the platform while providing a solid foundation for future innovations.
Eric Davison, director of Callan’s Independent Adviser Group, said in a press statement that the addition of an enhanced due diligence process, combined with Proteus’ proprietary and highly differentiated access platform, gives investment advisers efficient access to alternative investments in ways that were previously not available.
“It’s a win-win for advisers and family offices,” Davison said at the time. “Not only will they get access to a platform of well-vetted offerings at favorable account minimums and terms, but Proteus’ technology platform brings significant efficiencies in accessing, subscribing to and administering both individual and firm-wide private investment programs.”
Pete Keliuotis, head of alternatives consulting at Callan, added that the Proteus partnership offers leverage of Callan’s alternatives research and positively differentiates the consulting firm’s services.