Firms Scramble to Snag Tech Entrepreneurs
When a technology entrepreneur enjoys a liquidity event, wealth managers all over the U.S. vie to manage the assets, reports The New York Times. It was ever so. But the latest batch of tech IPOs — and the buzz around the newest social-media and mobile-app start-ups — is creating what amounts to a cottage industry of financial advisors who want to cater to rich young investors.
The Wall Street firms that underwrite tech offerings naturally grab a big piece of the pie, but there’s plenty to go around, the paper suggests. Even the robots are at the table: Online investment-management company Wealthfront, based in Palo Alto, Calif., looks for clients among the employees of social-media companies that haven’t yet gone public, betting there’s a big payday in their future. Across the country in New York City, Papamarkou Wellner Asset Management, an RIA for high-net-worth investors, serves clients who work for Google and have investable assets in the nine figures.
Another New York firm, Seven Bridges Advisors — whose CEO chairs Brown University’s investment committee and which mainly serves endowments and HNW families — counts one of Zynga’s cofounders among its clients, according to the Times. And BMO Harris Bank has a boutique unit in Silicon Valley, Harris myCFO, offering such concierge services as buying Ferraris and Mercedes for wealthy whiz kids.
One fast-growing, high-profile beneficiary of all the new tech wealth is Iconiq Capital, launched in 2012 by breakaway advisors from Morgan Stanley. The firm has AUM of $7.6 billion, the newspaper says; Facebook founder Mark Zuckerberg and Sheryl Sandberg, the company’s COO, were among its first clients, along with LinkedIn cofounder Reid Hoffman. The Times writes that although Iconiq’s fees can, on paper, be as high as 1.5% of assets, its clients are so rich they pay less than half that rate.