Adventure capital returns to direct indexing
The next surge of acquisitions will be of the long/short variety
What I’m reading…
AQR: A Brief Guide to Pricing and Taxation of Variable Prepaid Forwards
Ropes & Gray: Overview of ETF Share Class Operational Issues
Parametric: Potential Pitfalls of Loss Harvesting During High Volatility
Bloomberg/Scott Welch (2001): Having Your Cake, and Hedging it, Too (A discussion of Variable Prepaid Forward Contracts)
📢 Call For Client Stories
I’m looking for client stories. 100-150 word examples of situations and solutions in taxable wealth that you want to share with the world. Some quirky recent examples:
🏆 Client inherited $380,000 in gold ingot, monetized, and diversified tax-neutral using tax-aware long/short
🍷 Client developed an allergy to wine… but had 5,000 bottle collection. Adviser arranged to donate bottles.
I like mundane cases too (my story on Medicare premiums)… so don’t hesitate to share your work if it solved a tricky problem or intrigued you or was just interesting/weird. More human = better.
When you share a story, my default assumption is that I may write about (maybe even illustrate) whatever you send me. I will honor personal and firm anonymity if you request it.
brent@taxalphainsider.com (seriously… 100-150 words… that’s all).
Adventure Capital
Nuveen Acquires Leading Custom Multi-Asset Direct Indexing Provider, Brooklyn Investment Group
Fintech platform Wealthfront Corporation confidentially files to go public in US
Recently…
Betterment Acquires Rowboat Advisors to Accelerate Platform for RIAs
Ethic Raises $64M, Led By State Street Global Advisors
Investing Platform Seeds Raises $10M in Series A Funding
Nitrogen Founder Aaron Klein Launches Meeting OS for Advisors (raises $5.5mm)
I can’t help but poke fun since there are already a dozen adviser meeting apps, er uh OSs…
Maybe Contio is different. I don’t know.
An efficient meeting has an agenda, goals, and an enforcer.
The most efficient meeting is the one that never happened.
Ropes & Gray Operational Issues with ETF share class relief is a solid read
Tax-Aware Long/Short Expands
Direct indexing 2.0 is not the right way to think about tax-aware long/short.
For one, long/short extensions seek pretax alpha for investors and the IRS. Another reason is that several implementations use an ETF for core exposure to minimize the expense and tax/rebalancing cost of keeping tracking error low.
No idea what I’m talking about? Get up to see on tax-aware long/short.
But it is the right way to think about product growth and the acquisition surge that will happen once the wires realize what they’re missing.
I’d say tax-aware long/short is about where direct indexing was, in terms of market saturation, in 2010(ish). But it’s going to grow a lot faster.
After posting this yesterday, two more SaaS vendors confirmed they have long/short solutions in the works.
Respectfully, no…
