While not the pivotal moment, a stay at Richard Branson's home in the British Virgin Islands four years ago did serve as a nudge for investment banker Peter Williams to think about a career change.
After that visit, his ideas took shape for what became the Accredited Capital Exchange Group Inc., the first real innovation in private placement since, well, ever. The online portal securely connects qualified investors with private-investment opportunities being marketed by investment banks and other agents. This severely oversimplified explanation fails to convey what the group is doing.
With the markets unsettled and risk-free growth not even beating inflation, advisers are seeking promising alternative investments like never before. Tools that allow access to the primary market, such as the one the ACE Group has built, could shake up an untouched portion of the investment industry.
The portal should allow the high-net-worth clients of large registered investment advisers and family offices — meaning wealthy clients who are shy of Warren Buffett status — to access the kind of private-placement deals they weren't able to participate in previously.
Advancements include streamlining, automating and providing scalability to what had been a completely manual, tedious, cumbersome process entirely based on personal relationships and pushing paper — reams and reams of it.
“I am one of those people that really get physically upset when I see things that make no sense, so I thought that there had to be a business here in improving and modernizing the private-placement process,” Mr. Williams said.
The 39-year-old had had entrepreneurial concepts before. But the exclusive company in which he found himself at Mr. Branson's Ecology Summit reinforced a desire to take his career down a similar but divergent path. Mr. Williams was the only investment banker at the event, which received mixed reviews in the press. (Some suggested that wealthy non-experts meeting in a private tropical paradise would do little to alleviate the Earth's problems.)
“Everyone except me arrived on their own jet,” Mr. Williams said.
This was not a point of envy but illustrated for him the control and freedom that entrepreneurs have and that largely elude the rest of us, including those stuck in the tradition-bound investment banking business.
Mr. Williams always enjoyed the positive aspects of investment banking, namely when it resulted in creation — starting a business, or at least helping to finance it. He spent a decade building his career, rising through the ranks at a steady clip: Starting out as an associate in 2000, he became an executive director of investment banking at CIBC Oppenheimer in 2009.
Not bad for a country doctor's son from the Canadian province of Newfoundland. His father spent a career serving the small coastal community of Come by Chance. Mr. Williams' siblings followed his father into medicine, while he instead pursued a degree in mechanical engineering — both to be different and to lay the groundwork for most any career that might be more mathematically challenging, he said.
Within a few years, he returned to school for an MBA at the University of Western Ontario, then began working in Toronto as an associate with Donaldson Lufkin & Jenrette, which Credit Suisse bought soon after.
Despite the backwardness of the industry, over the next 10 years, Mr. Williams raised more than $13 billion in financing, including public and private equity, as well as private investments in public equity.
The ACE portal should make him of particular interest to sophisticated advisers in 2013.
“It is really automation of the process — being able to interact with 1,000 parties as easily as 25,” Mr. Williams said, describing the contrast with the way he, as a new investment banker, had to go through a paper list and call prospects manually.
A lot of private-placement activity still relies on paper, traditional mail and faxes, he added. “You see people coming into the industry, especially young professionals, and they must be shaking their heads ≠— I can tell 500 of my closest friends what I had for lunch in the blink of an eye,” he said, referring to social media.
ACE Group's remaining challenges include marketing and clarifying what the portal does.
Many potential investors, clients and placement agents mistakenly put the group in the crowd-funding bucket or think it is a secondary market, Mr. Williams said, adding that it is instead part of the primary market — albeit the 2.0 part.
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