FINTRX Continues to Innovate Family Office Capital Raising
It’s tough being rich. I don’t say this in jest – it’s true that some facets of ultra-wealthy life are more challenging than they appear at face value. Take, for instance, asset management. With a third of American debtholders facing collections and household debt hitting record highs, it’s obvious that personal finances are difficult for most of us. When it comes to ultra-high net worth (UHNW) individuals, the old adage ‘more money, more problems’ rings true, as the difficulties of managing large pools of capital, and navigating the tax system exceed the abilities of any one person. To assist with these tasks, the wealthy employ a niche group of experts in asset management and legal affairs; an obscure slice of the alternative investment sector commonly referred to as ‘family offices’.
Russ D’Argento is no stranger to the family office landscape. Diving into the sector soon after graduating from the University of Connecticut, Russ is intimately familiar with the functions and objectives of both these family offices and the funds and companies that pursue their capital. It’s no wonder, then, that I reached out to Russ for his perspective on the market and to learn how he and his company, Cap Hedge Ventures, has been revolutionizing the family office space.
Outside of the legal and administrative functions inherent to family planning, family offices primarily seek to find a home for the funds they manage. With a starting AUM of $50M+, they are prime targets for a variety of investment managers, especially since they can shift funds far more easily than other large asset pools (like pension funds). Moreover, family office capital tends to be sticky, utilizing a larger spread of investment opportunities and often taking a long approach to capital allocation.
In the early days of his career, one thing Russ found to be extremely apparent was that, even though family offices are extremely attractive pools of capital, there was staggeringly little data or research on them. Unlike the large institutional investors, which are often focused on by banks and institutional investors, the family office space was oriented around relationship managers, who broker deals between family offices and investment managers. One such shop is Boston’s Windham Capital Group, where Russ began his career. There was a tremendous amount of legwork involved in the assigned task of increasing the firm’s family office relationships. Locating these family offices was a laborious task in and of itself. Russ kept track of the conferences family offices attended, and their investment dispositions and contact information, often digging through old rolodexes, pages of Google searches and LinkedIn contacts to compensate for the lack of reliable, insightful information on that segment of the market. Taking stock of these pain points and finding inspiration in the smooth and intuitive UI’s of modern social media and CRM platforms, Russ set out to build the prototype of what would eventually become the flagship product of Cap Hedge Ventures, FINTRX.
FINTRX is incredibly sleek. It’s interactive, dynamic, and the antithesis of static. It serves as an information bank on the family office universe, providing investment dispositions, areas of interest, contact information and deep dive prospecting research. The platform presents this to its user base via extensive dossiers that aid asset managers in leveraging their networks to make seamless connections with targeted family offices.
Beginning first with records on just 600 offices, in the short four and a half year span since Russ first rolled out FINTRX, it has expanded to include over 2,100 offices, with over 8,000 individual contacts. Additional functionalities have kept pace with this explosive growth, in comparison to the static, unintuitive legacy interfaces used by many throughout the capital markets space. Most notably is the recent release of FINTRX Buy-Side, a premium product providing clients with further insight on direct deals that family offices have funded. FINTRX has now grown into an agile, cloud-based product, that leverages powerful technology, including artificial intelligence, designed to allow its clients to find warm family office introductions, research, and data.
Despite its roots as a bespoke solution to a niche field, the FINTRX clientele has now grown to include the large majority of the industry’s blue-chip asset managers across a myriad of asset classes. Though still a privately held company where revenue totals and growth totals are held close to vest, it’s quite obvious that their rise has been parabolic.
When asked about the path forward, Russ now looks towards potentially expanding the investor types covered within FINTRX and the continued expansion of the platforms technology. The gains that his platform bring to the family office space address many of the pain points that capital raising professionals experience each and every day. It will be fascinating to see how far FINTRX can push the envelope in this vertical.
Innovation is often desire backwards engineered. Russ D’Argento found shortcomings in the market and capitalized upon them, not only making his job easier but launching the family office space into the 21st century.
I asked him what he would say to the many undergraduates who look to his story for inspiration. “Find a true pain point in an area you’re passionate about, assemble a forward thinking team, and set out to fill that the void”, he said, “and the rest will follow from there.”
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Written by Chasen Richards & Edited by Jack Vasquez, Rachel Weissman, Alexander Fleiss
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