The desire to invest in alternative asset class areas such as private equity, credit, hedge funds and forms of real estate remains strong.

Advisor Group, the US network of wealth manager firms serving about 10,100 advisors and overseeing more than $515 billion in client assets, has chosen alternative investment platform CAIS.

Under the terms of the arrangement, Advisor Group is to provide a platform solution for improved alternative investment access, education and transaction workflow. 

Through the platform, Advisor Group’s financial professionals will gain access to a curated menu of alternative investment products, including hedge funds, private equity, real estate, and private credit. All funds will undergo Mercer’s third-party independent due diligence, giving Advisor Group’s Home Office and financial advisors additional confidence in the funds they select for their clients, CAIS said.

The deal is an example of how the rising importance of alternative investment for wealth managers is driving business for entities such as CAIS. In early April, Reverence Capital Partners put $100 million of capital into CAIS to finance its business growth. That infusion added to the $225 million fundraising round for CAIS in January. 

CAIS is one of a handful of organizations seeking to widen access to alternative investment areas such as private equity, venture capital, private debt and infrastructure. These areas have boomed because they compensate investors for low liquidity by offering superior yields when returns from listed stocks and government bonds have been squeezed. According to the Chartered Alternative Investment Analyst Association, alternative assets are expected to make up to 24 per cent of the global investible market by 2025, up from 12 per cent in 2018.

In 2021, transaction volume on the CAIS platform rose by 69 per cent, with the number of platform users increased by 29 per cent in the same period.

“We were looking for a trusted long-term partner and what attracted us to CAIS was their flexibility to customize the platform’s product menu, simplify the transaction process, and integrate our wealth management ecosystem to help solve the needs of all types of clients, from high net worth to mass affluent,” Shannon Larson, senior vice president, platform management and product development at Advisor Group, said. 

Family Wealth Report interviewed CAIS's chief executive, Matt Brown, about its strategy and business model here.