Welcome to Financial Advisor IQ

Halite Focuses on Institutional-Style Service for Wealthy Investors

By Rita Raagas De Ramos March 16, 2018

Halite Partners is a relative newcomer in the RIA space, but its founder and key executives are relying on their decades-long experience in advising institutional clients to build a niche service for wealthy individuals -- and become home to other wealth practices looking for a new berth.

The Columbus, Ohio-based RIA was founded in June by Phil Shaffer, an ex-Morgan Stanley advisor, and registered with the SEC in July of last year.

Shaffer spent 24 years at Morgan Stanley, having joined its predecessor Smith Barney in 1993. Until June, he was registered with Morgan Stanley and was the institutional consulting director of the wirehouse’s subsidiary, Graystone Consulting, which he co-founded.

Four other executives at Halite were also previously at Graystone. Norm Cook, Halite’s president and chief marketing officer, was an institutional consultant at the firm and Lee Caleshu, Halite’s chief investment officer, was director of investments. Josh Shaffer, Halite’s director of research, held the same position at Graystone and Annie Sidwell, a family wealth advisor at Halite, was involved in business practices, overall operations and marketing at the firm.

At Graystone, Shaffer’s team catered largely to institutional clients – such as endowments, foundations, pensions and health care centers – and to multi-family offices.

At Halite, Shaffer expects to have a greater focus on providing institutional investment solutions to multi-family offices, which he expects to range from $25 million to $500 million in accounts, averaging around $50 million per account.

“We do think it’s a big differentiator – our ability to do portfolio construction, risk analysis, true investment management. That’s very different from the capabilities of a lot of the RIAs,” says Cook, who earlier in his career was the head of the institutional investment management business at JP Morgan. “We have a great deal of experience in managing institutional dollars, and we are providing that expertise to our individual and family office clients.”

The ability to provide access to coveted investments is another differentiator for the firm, according to Cook.

“Because of our longstanding relationships and the amount of money we manage, we can call closed funds, even those that have been hard-closed for several years, and they can accommodate us,” Cook says.

Cook says those asset managers are willing to accept pooled investments from Halite’s individual or family office clients also because the firm has “hundreds of millions of dollars” invested in those funds on behalf of their institutional clients. The pooled investments allow Halite’s clients to invest as low as $250,000 in the pool, he says.

Halite – the mineral name for "rock salt" – has around $2 billion under management, with $1.5 billion expected to arrive by the end of this year, according to Cook. The firm accepts a minimum investment account of $10 million, and it charges a minimum fee of $50,000 a year.

“There is a pocket of RIAs that have not grown very much over the last 10 years. We will be scouring that list for potential acquisitions.”
Norm Cook
Halite Partners

Cook says Halite is a “strong advocate” for private equity investments, where around 15% of its current client assets are allocated. Another 15% is in hedge funds, particularly those active in the private credit space. The rest are in traditional equity and fixed income funds, including ETFs.

The majority, or around 80%, of Halite’s new business is coming from the wealth space, partly by design and partly because of client referrals. There’s also a constraint in terms of growing Halite’s institutional client assets for now because most institutions require a track record of three to five years.

Despite the institutional client experience of the Halite team in their past companies and roles, that track record is “not portable,” Cook notes.

In addition to organically acquiring new client assets, Halite plans to be an active acquirer of RIA practices – one or two per year – in various cities where wealth is concentrated.

“There is a pocket of RIAs that have from $300 million to $600 million in AUM that have not grown very much over the last 10 years, and they have a proprietor who’s probably in his 60s,” Cook says. “There are about 5,000 of those RIAs. We will be scouring that list for potential acquisitions.”