Private markets wealth technology platform Opto has launched a series of product enhancements, including the addition of a new CIO toolkit. The toolkit, along with pre-trade analytics capabilities and the ability to create customized white label funds, enhances the platform for its chief investment officer clients. Opto co-founder Jake Miller said the leadership changes announced alongside these enhancements are designed to bring greater clarity to key responsibilities as the company grows.
Opto’s latest product enhancement center is designed to assist CIOs with investment selection and management. The CIO Toolkit leverages Opto’s private market performance data set, allowing users to screen proposed investments by comparing their performance to similar assets and public markets, run stress test scenarios and screen for deviations. It will also provide them with artificial intelligence tools to extract data from relevant documents for analysis and share with the team.
CIOs are often inundated with investment pitches, and the CIO toolkit will allow them to narrow down the field of potential fund proposals from hundreds or thousands to a few dozen that better match their criteria, Miller said. It will also reduce the time they spend in meetings and phone calls discussing these proposals with employees.
In another upgrade, Opto will enable investment professionals to conduct pre-trade analysis to help make decisions about: when to enter or exit an investment, how liquid it is, how much cash flow they are likely to receive when investing in a fund and how they use their cash flows to maintain customers’ desired portfolio allocations of alternatives. The recommendations will be based on data collected by Opto from hundreds of thousands of funds since the 1980s.
“You can plug (the data) into any existing portfolio or any forward-looking allocation and model, ‘Given where I am today, what do I need to get that allocation and what does that do to my cash? What does it mean to flow out and back into my portfolio?” Miller pointed out.
In addition, the company also provides customers with customized fund creation and management services, allowing them to create a single white-label fund from multiple underlying private equity funds and manage it through the Opto platform. Miller said most clients prefer to access private markets through such customized white-label vehicles because the top funds in the space tend to be oversubscribed and have prohibitively high investment minimums. It also makes it more difficult to create diversified portfolios for clients who don’t have tens of millions of dollars to invest. However, he pointed out that if customized funds are spread across multiple Opto clients, end investors can participate in the same top funds at a much lower minimum amount.
Customized white-label funds allow RIAs to stand out from the competition, Miller added. “It’s really everything they want to bring into their lives, but it’s something that’s not available anywhere else. Their customers can’t walk down the street and get the same thing as they can with some very large transactions.”
Some of Opto’s competitors in alternative investment platforms, including iCapital, CAIS, GLASFunds and Subscribe, also offer white label fund functionality.
In terms of personnel changes, Miller serves as chief solutions officer, responsible for strengthening partnerships with RIAs and integrating institutional quality programs into Opto’s platform. The company’s other co-founder, Matt Reed, is now the company’s chief technology officer. Reed has led Opto’s engineering efforts since its inception.
“This is more of a description of how things actually work rather than a shift in focus on either side of us,” Miller said. “We’ve grown as a company. We’re about to hire 75 employees, and with that comes we want to get a clearer picture of what we all do here and try to pivot around key functions.”
Miller added that the chief solutions officer position was created out of a desire to elevate solutions as a department.
Opto CEO Ryan VanGorder said in a statement: “As we continue to work with more advisors, Jake and Matt will become an integral part of Opto’s suite of innovative solutions that will modernize workflows and simplify private placements for advisors. Market experience.”
