Bill Hortz's picture

"The changes we made were both inevitable and way overdue." James Waldinger, Artivest

[The Institute for Innovation Development Artivest  marketplace. Artivest, a NYC-based fintech company, offers a technology-driven investment platform that expands access to leading private equity and hedge funds. After our first interviewthe firm went on to win a host of industry awards including: 2 consecutive Private Asset Management (PAM) Awards for “Best Investment Platform – Innovation” 2016 Private Asset Management Award for “Best Fund Product for HNW Clients” , and the 2016 Industry Award for “Outstanding Achievement In Technology Disruption”.  All this attention motivated us to dig a little further.]

Hortz: Congratulations on the string of awards your firm has won since we last talked. What do you attribute to your growing recognition?

Waldinger: Before we re-engineered the way private funds are marketed, purchased and monitored, it had been many decades since anyone had thought about improving the process. Meanwhile, the way people buy just about anything else has changed dramatically thanks to digital technologies. The changes we made were both inevitable and way overdue.

The recognition comes from working hard on creating a platform that optimizes work flows for asset managers and financial advisors by digitizing only the tasks where the human touch does not add value. So far, no one at our fund partners has expressed any nostalgia for their long days of manipulating Excel spreadsheets and fax machines, for example. On the other hand, funds and advisors have expressed relief at having more time to talk to clients about actual wealth management, as opposed to correcting the third mistake on page 72 of a subscription document. 

Our vision is that Artivest becomes the universal nexus for all things alternative investments, whether or not an intermediary is involved, whether that intermediary is part of a big bank or a small independent advisory shop, and whether the product is a private placement or a registered investment contract. 

Hortz: Please give us a lay of the land. To what extent have you had competition with other alternative platforms and how do you differentiate?

Waldinger: A number of players are trying to solve for the question of how to efficiently and cost-effectively service smaller investors in private alternative funds. Before Artivest, there were three types: 1.)placement agents who offer traditional capital introduction for a fee but leave both investor and fund with cumbersome paperwork and reporting to navigate; 2.)tech-only providers that alleviate part of the paperwork burden, e.g. by hosting documents online; and 3.)social networking platforms that introduce issuers and investors but neither offer institutional-caliber managers nor deploy a research team to select funds. Artivest is the first and only independent solution combining technology, operations, compliance, manager research and product structuring to provide a seamless experience for both investors and sponsors of top private funds. 

Hortz: You have announced a number of strategic partnerships ranging in scale from smaller but growing wealth advisory firms, like NYC-based Snowden Lane, to Nuveen, one of the largest asset managers in the world, and most recently to Altegris, California, a CA based investment research firm. Can you describe the nature and goal of your partnerships?

Waldinger: Adoption of Artivest technology has grown dramatically in both the wealth management and asset management communities. With our asset manager partners, wholesalers use a white-labeled platform to provide their Financial Advisor clients with intuitive virtual marketing materials and original documents under a single sign-on. The wholesalers can use the platform's back-end to keep close tabs on each advisor's engagement and progress. The Artivest solution is expected both to increase the assets raised from independent advisory clients and to significantly reduce related costs. On the wealth management side, firms like Snowden Lane with groups of affiliated offices use our technology to harmonize processes and more efficiently place and track alternative investment activity.

Each partnership is unique and consultative. We begin by creating a scope of work in concert with our partner's home office. During the execution phase, we work closely with teams across the partner organization, from sales to operations and technology. It's an iterative process, and each of our partners has contributed to making our offering more useful for the next set of users.

Hortz: While your primary focus is on working with financial advisors and the wealth management arena, what have been your experiences and what are you seeing as to the adoption of your platform from institutional investors?

Waldinger: Given their desire to diversify their respective LP bases, institutions have been extremely receptive to our product/technology. Through our seamless onboarding capabilities, creation and oversight of conduit vehicles, and user friendly user experience - institutions are actively engaged in potentially partnering with us. 

As is the case with the adoption of new technologies, the switch to a digital solution in the alts space for institutions has been a slow one, given the drastic shift a digital provider like ours could have on a business. That is not to say that adoption will take a very long time - we are in talks with major institutions and even have pilot-programs approved at select large banks. 

In a nutshell, we view partnering with enterprise clients such as large asset managers, broker/dealers and wirehouses as a key focus for our firm, and we truly believe that they can greatly benefit from the utilization of our product. 

Hortz: What do you see as your firm’s business potential in providing growing access and continuing to drive technology in the alternatives industry? 

Waldinger: The nature of our work with asset managers lends itself to stable, repeatable, long-term revenue generation. Artivest adds value throughout the life cycle of each fund whose distribution and ongoing maintenance we support. For private equity funds this is a 10+ year process. Moreover, since private equity funds are closed-ended, sponsors regularly raise successor funds, leading to repeat engagement with Artivest.

Hortz: Based on your unique vantage point, what would you advise financial professionals about the alternatives marketplace?

Waldinger: ETFs have opened a world of low-cost beta that has put pressure on managers without a performance edge, creating an easy way for advisors to demonstrate advocacy to their clients. That said, the availability of cheap beta has encouraged some advisors to take mental shortcuts, preaching to clients that the cheapest option is always the best option. 

The most sophisticated (and successful) advisors we work with have a more nuanced view on rationalizing expenses for their clients. These advisors focus on net return. For asset classes in which active management has not historically added alpha, they deploy ETFs. In other asset classes, particularly in private markets (private equity and credit, for example), they seek strategies with sustainable competitive advantages. As fiduciaries, they avoid excessively costly products, but they recognize that the expertise and the research capacity required to produce sustainable returns is not offered for free.


Article previously posted on Financial Advisor Magazine Online.


The Institute for Innovation Development is an educational and business development catalyst for growth-oriented financial advisors and financial services firms determined to lead their businesses in an operating environment of accelerating business and cultural change. We position our members with the necessary ongoing innovation resources and best practices to drive and facilitate their next-generation growth, differentiation and unique community engagement strategies. The institute was launched with the support and foresight of our founding sponsors - Pershing, Voya Financial, Ultimus Fund Solutions, Fidelity, and Charter Financial Publishing (publisher of  Financial Advisor and Private Wealth magazines). For more information click here.     


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