1 Formation and Management of a Feeder Fund

Client Profile:

Wealth management team recently left large broker-dealer to form an independent registered investment advisory (RIA) firm

Opportunity:

RIA wanted access to a private equity fund which had a $10M minimum

Challenges:

  • RIA wanted to replicate the back office services that the large broker dealer previously provided
  • RIA lacked experience in developing, launching and managing a private feeder fund internally
  • RIA was unable to maintain operational and compliance standards of a limited partnership structure
  • RIA needed a larger investment base in order to achieve economies of scale

PPB’s Solutions:

  • PPB designed and built a feeder fund and accepted a $15M capital commitment at first close
  • PPB replicated the structure and terms of the underlying fund to ensure the integrity of the investment
  • PPB managed all daily operational responsibilities of the structure
  • PPB secured a quality network of counterparties to offer the RIA the most efficient providers
  • PPB added investors through seven additional RIA firms, reduced operating costs by 3.5X and aggregated $70M of total capital commitments at the final close

2 Formation and Management of a Customized Fund of Funds

Client Profile:

Established registered investment advisor (RIA) with over $3 billion of assets under management

Opportunity:

RIA wanted to create a customized fund of funds that provided clients access to private equity, venture capital, real estate, co-investments, and direct investments

Challenges:

  • RIA needed to ensure investment diversity and risk-adjusted returns through a single, low cost vehicle
  • RIA clients were required to sign multiple subscription documents
  • RIA wasted time constantly contacting clients for capital calls
  • The RIA wavered between taking on both General Partner (GP) and investment manager roles verses outsourcing GP responsibilities

PPB’s Solutions:

  • PPB designed and built a custom fund of funds and accepted a $20M capital commitment at first close
  • PPB created one structure that allowed the RIA’s clients to sign just one subscription document
  • PPB efficiently called capital by reducing the quantity of the number of capital calls throughout the lifecycle of the fund
  • PPB accepted the responsibility of the multiple risks associated with the General Partner role
  • PPB provided the RIA with institutional alternative investment opportunities for clients and prospects
  • PPB’s capital commitments exceeded $50M and annual operating costs were lowered to less than ten basis points at final close

3 Bypassing PPB’s Platform and Investing Directly with the Manager

Client Profile:

Multi-family office (MFO) with over $5 billion in assets under advisement with an average client of $50M that could meet institutional investment minimums

Opportunity:

MFO investment committee expressed interest in allocating capital to a fund that focused on purchasing infrastructure assets (ports, airports, bridges, etc.)

Challenges:

  • MFO’s manager search and selection capabilities were hindered by limited staff and resources
  • MFO’s operational due diligence capabilities were limited

PPB’s Solution:

  • PPB provided an attractive investment opportunity with its institutional deal flow
  • PPB made the introduction and facilitated the relationship between the wealth manager and the fund manager
  • PPB provided independent due diligence from third party consultant
  • MFO made a $24M investment on behalf of two clients—$19M and $6M respectively

4 General Partner (GP) Takeover of Existing Internal Proprietary Fund(s)

Client Profile:

Established registered investment advisory (RIA) firm with over $1.5 billion of assets under management

Opportunity:

RIA wanted to outsource two established proprietary private funds with over $60M of total assets

Challenges:

  • RIA daily fund operations bogged down back office and escalated fund costs
  • RIA experienced increased opportunity costs by operating fund internally
  • RIA struggled with identifying potential private fund compliance risks
  • RIA’s core competency was manager search and selection, not fund operations

PPB’s Solutions:

  • PPB delivered a non-burdensome consent solution, became GP and relieved RIA back office
  • PPB eliminated opportunity costs by allowing RIA back office to refocus on core roles
  • PPB became operating fiduciary of the funds and accepted compliance risks
  • PPB’s scale reduced operating costs for RIA clients