Addepar Rolls Out New Alternatives Management FeaturesAddepar Rolls Out New Alternatives Management Features
These include private fund benchmarks, various data management improvements and cash flow forecasting.
Addepar, the technology platform provider to RIAs and wealth managers, announced this week the launch of several new toolsets and features, including Alts Data Management, Private Fund Benchmarks, and cash flow forecasts within Navigator (its portfolio projection tool).
The mission for these new capabilities is one often cited by technology providers: improved operational efficiency for those managing complex portfolios with alternative investments, be they large RIA, other wealth managers or institutions.
“Providing a native alts management platform is critical for us,” said Don Nilsson, Chief Product Officer at Addepar, in an interview with WealthManagement.com.
Addepar’s Alts Data Management features extract data from many types of alternative asset documents, including capital calls, capital account statements and distribution notices.
“It combines AI technology, including our proprietary AI models and adds human verification by trained analysts when appropriate,” said Diana Turbayne, a senior product manager with Addepar who oversees alternatives technology.
“Documents that get a large number of flags [during the extraction and analysis] process get reviewed by a human, and then it is normalized and goes into the rest of the Addepar platform,” she said.
Addepar’s Private Fund Benchmarks were developed from aggregated and anonymized data within the Addepar platform. They are meant to help advisors report on the performance of their clients’ private fund investments. As noted in the firm’s prepared statement, the benchmarks have data from 12,000 funds, 4,400 managers and 115,000 limited partner positions.
“We take the data and put it into a bucket, whatever the fund type, 20 different categories ultimately, so 20 benchmarks, and this includes since inception and quarterly returns,” said Nilsson. He said that the data provided includes distribution to paid in capital (DPI), total value paid in capital (TVPI), two common metrics, which will in the next week include IRR as well.
“This all seamlessly populates throughout the entire platform, and we also provide fund quartiles, so folks can look at funds over years,” said Nilsson.
With built-in assumptions based on actual historical cash flows, clients can generate forecasts based on real investment patterns across alternative positions, including private equity, venture capital and private debt.
Navigator, which came via the acquisition of Real Capital Innovation or RCI, four years ago, provides private fund cash flow forecasts that also draws from an aggregated and anonymized dataset of capital calls and distributions.
“Prior to the acquisition, we saw how well it was resonating with our clients and how accurate it was for predicting capital calls coming in, and we’ve continued investing in the development of that—with 12,000 funds on the platform, that dataset is enormously valuable,” said Nisson.
He reiterated Addepar’s statistics, which are also noted in the prepared statement: The firm now works with 1,200 client firms managing and advising on more than $7 trillion in assets—40% of which are alternative investments.
“Across those client firms, we have hundreds of thousands of users; a sizeable percentage are RIAs, as well as family offices, large enterprise banks, including UBS and Morgan Stanley and increasingly in the institutional space,” he said.
Addepar launched its own trading platform in December. And among its other notable acquisitions was the trading and rebalancing technology startup AdvisorPeak in 2021.
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