North Capital Inc., an SEC-registered investment advisor, now offers advisory services, as a fiduciary, for investors in private markets.
Background. North Capital opened for business fourteen years ago as a registered investment advisor, and it currently has $227 million of assets under management and an additional $338 million of assets on which we provide advice. Until this year, the Firm did not offer an advisory program for private investments, and for good reason. As a provider of placement services to issuers of private securities through our registered broker-dealer, North Capital Private Securities Corporation, we did not believe that we could faithfully serve both our issuer and advisory clients.
Access, liquidity, and transparency. Our business has shifted dramatically during the past three years. Today, the focus of our broker-dealer is on providing foundational infrastructure to other broker-dealers, investment advisors, and investment platforms: compliance services, escrow and payments, clearing, custody, and secondary trading through our alternative trading system, the PPEX ATS. These services are fundamental to North Capital's mission to bring access, liquidity, and transparency at scale to private markets, through the development of infrastructure technology.
Need for advisory services. At the same time, it has become clear that investors’ need for objective advice related to private investments has never been greater. Individual and institutional investors want help choosing from among the thousands of investment products that are now generally available, and they want that help to be provided by an advisor whose interests are aligned with theirs.
Private markets have experienced explosive growth compared to public markets during the past seven years, with a proliferation of new asset classes, strategies, and investment structures. Our research and due diligence team has reviewed thousands of private investments, so we feel especially qualified to make this statement: while opportunities in private markets abound, so does risk, incompetence, and fraud. We believe that now, more than ever, it is essential for investors in private markets to have access to the expertise of qualified advisors who provide fiduciary counsel.
How do we offer this advice? We offer two options: a managed program, whereby North Capital Inc. develops and implements a custom allocation for you; or a select option, whereby our advisors analyze, assess, and make recommendations about specific investments that you have identified. In both cases, we offer advice as a fiduciary, which means that we always put your interests first. Our priority is always to provide objective guidance and quantifiable value to our clients. Private investments are not appropriate for every investor, especially investors who require or wish to maintain a high degree of liquidity in their portfolios. And the risk of underlying private investments is as variable as the investments themselves. Our private markets advisory service is designed to explain, analyze, quantify, and assess the risks and opportunities of investments in private markets.
What asset types do we cover? We cover a broad range of private assets, including real estate, hedge funds, private equity, private debt, venture, crypto, direct investments in private companies, and frontier alternative investments. What is the fee structure? The advisory fee will follow the Firm’s standard schedule for discretionary and non-discretionary services, including break points. The Firm offers fixed fees and hourly fees for non-discretionary advisory services related to private markets.
What are the Firm’s qualifications to offer advisory services in this area? North Capital’s team of investment professionals has been involved in over 280,000 private market transactions worth over $4.4 billion since 2014. The Firm’s senior personnel variously hold the CFA charter, the CFP designation, the CPA credential, the ChFC designation, and a variety of FINRA registrations. Jim Dowd, the Firm’s CEO, has been involved in private markets for 37 years, during which he has advised clients on dozens of private investments. Prior to founding the Firm, he was a Senior Managing Director at Bear Stearns Asset Management, responsible for the fund of funds and hedge fund advisory business. How can I learn more? Contact us to learn more about North Capital’s advisory services for private market investors.