Opto Investments, a private markets wealth tech platform, has added EP Wealth Advisors, a national RIA with $26.2 billion in AUM, as a user, bringing the total number of RIA firms the platform works with to over 250.
According to Jake Miller, Opto’s co-founder and chief solutions officer, that represents growth of roughly 133% over the past 12 months,. There are now close to 1,000 financial advisors using the platform, which went live two years ago, Miller said.
EP Wealth Advisors will use Opto’s custom funds—white-label fund strategies ranging from private credit and venture capital to infrastructure—to offer private markets exposure to its high- and ultra-high-net-worth clients. The minimum investment for clients to sign up with EP Wealth is $500,000. The firm employs over 400 financial advisors and has more than 36 offices around the country.
“We are super excited about the EP Wealth partnership, given their size, their approach to markets and their long-term plans for building out the EP private markets program,” said Miller. “It’s just another great example and a reflection of the general momentum that we’ve had in the wealth community this year.”
Unlike some of its peers in the alternative investment space, Opto foregoes evergreen funds in favor of traditional illiquid drawdown fund structures that are better suited for RIAs serving investors with qualified purchaser and qualified client status than those working with accredited investors. Qualified purchasers and clients can typically afford the illiquidity premiums that come with more traditional types of fund structures, where a private credit fund might have a five-year horizon for returns and a venture capital fund might be in the market for over 10 years, according to Miller.
“Where we focus with our clients is the still actually private part of private markets where the top family offices, sovereign wealth funds and endowments are searching for the best managers, have unique access and unique information they can leverage into robust and uncorrelated returns,” he said.
“Differentiation [in the alternative investments space] has gotten harder. Access alone is no longer enough. If I just want to access private markets, there are even things I can do as an individual, I don’t even need to go through a fiduciary. So how does an RIA set themselves apart as access increases? You need to work with a partner that’s focused on finding those unique opportunities vs. the mass market ones. And these things correlate with performance as well. The largest funds tend to look more like beta solutions.”
At the same time, RIAs with high- and ultra-high-net-worth clientele, like EP Wealth, can still use the platform to lower their clients’ investment thresholds. Through the Opto partnership, the minimum investment amount for EP Wealth clients will total $100,000 for access to 12 underlying growth managers. Those managers would typically require investment minimums of $1 million to $5 million each, Miller noted.
“When introducing private market strategies to client portfolios, a one-size-fits-all approach simply does not work,” said Adam Phillips, managing director of investments at EP Wealth Advisors, in a statement. “Opto’s fiduciary-first approach helps us build personalized portfolios that meet the unique needs of our clients, while providing access to institutional-grade investments from a vast array of managers.”