Private markets wealthtech platform Opto unveiled a suite of product enhancements, including adding a new CIO toolkit. This toolkit, along with pre-trade analysis capabilities and the ability to create custom white-label funds, bolsters its platform for chief investment officer clients. The changes in leadership positions, announced alongside these enhancements, aim to create more clarity around key responsibilities as the firm grows, according to Opto co-founder Jake Miller.
Opto’s latest product enhancements center is aimed at helping CIOs with investment selection and management. The CIO toolkit makes use of Opto’s private markets performance data set to allow users to screen proposed investments using performance comparisons to similar assets as well as to public markets, to run stress-test scenarios and to screen for biases. It will also provide them with an AI tool to extract data from relevant documents for analysis and share it with their teams.
CIOs tend to be swamped with investment pitches, and the CIO toolkit will allow them to narrow the field of potential fund proposals from hundreds or thousands to a few dozen that more precisely fit their criteria, Miller said. It will also reduce the time they might spend in meetings and making phone calls to discuss these proposals with staff.
In another upgrade, Opto will give investment specialists the ability to run pre-trade analysis to help make decisions on when to enter or exit investments, what their liquidity will look like, how much cash flow they might receive while they are invested in a fund and how they can use that cash flow to maintain their clients’ desired portfolio allocation to alternatives. These recommendations will be based on data Opto collected from several hundred thousand funds dating back to the 1980s.
“You can plug [the data] into any existing portfolio or any forward-looking allocation and model out ‘Given where I am today, what do I need to get to that allocation and what will that mean in terms of my cash flows, both out and flowing back into my portfolio?’” Miller noted.
In addition, the firm offers custom fund creation and management for clients, allowing them to create a single white-label fund from multiple underlying private funds and manage it through the Opto platform. According to Miller, most clients prefer to enter the private markets through such customized white-label vehicles because the top funds in the space tend to be over-subscribed and have prohibitively high investment minimums. That also makes it harder to create diversified portfolios for clients who don’t have tens of millions of dollars to invest. However, he noted that if the customized fund is spread across several Opto clients, end investors can participate in the same top funds at much lower minimums.
Customized white-label funds allow RIAs to differentiate themselves from the competition, Miller added. “It’s really whatever they want to bring to life, but it’s something that’s not available anywhere else. Their clients can’t walk down the street like they could with some of these very large deals and get the same thing.”
Some of Opto’s competitors among alternative investment platforms, including iCapital, CAIS, GLASFunds and Subscribe, also offer white-label fund capabilities.
In terms of its personnel moves, Miller has taken on the title of chief solutions officer, responsible for enhancing partnerships with RIAs and integrating institutional quality programs into Opto’s platform. Another firm co-founder, Matt Reed, is now the firm’s chief technology officer. Reed has led Opto’s engineering efforts since its founding.
“It’s much more about describing how things are actually working versus a significant shift in focus for either of us,” said Miller. “We’ve grown up as a firm. We are closing in on 75 people, and with that comes a desire to be just a little bit clearer about what we all do here and trying to align that around key functionalities.”
Miller added that the creation of the chief solutions officer role was driven by the desire to elevate solutions as a department.
“As we continue to partner with more advisors, Jake and Matt will be integral to growing Opto’s suite of innovative solutions that modernize workflows and simplify advisors’ private markets experiences,” said Opto CEO Ryan VanGorder in a statement.