Alternative investments manager Ballast Rock joins RIA game

Ballast Rock Private Wealth will operate independently of Ballast Rock Asset Management, but both firms focus on offering alts to wealthy investors.

Ballast Rock Group, a 4-year-old asset manager specializing in alternative investments, is branching out into the financial advice business with a registered investment adviser that is building sophisticated portfolios for wealthy clients.

Ballast Rock Private Wealth, based in Charleston, South Carolina, is an RIA designed and developed to provide the kind of service Ballast Rock Group founder Thomas Carroll said he would like as an advisory firm client.

“I am the first client,” he said. “This firm is exactly what I want out of an RIA.”

Carroll, who acts only as an adviser to the new RIA, is tapping into the trend toward increased allocations to alternative investments during an economic cycle that has not been kind to traditional stock and bond portfolios.

“We’ve found alternative investments have been less volatile and perform better than traditional investments, it’s just a question of liquidity,” he said. “Most investors have a capacity to have less liquidity.”

The private wealth RIA operates independently from the asset management business, which over the past four years has raised $220 million in private real estate, venture capital and energy transition investments.

Andrew Mescon will be CEO of Ballast Rock Private Wealth, while Christian Salomone will serve as the firm’s chief investment officer.

Mescon joined from Integrity Financial Corp., where he was vice president of wealth management. Salomone was a managing director at Bank of America and Goldman Sachs.

Jason Thonssen will be chief compliance officer and director of client service, after previously working at Coldstream Wealth Management and Integrity Financial.

Carroll, who spent nearly 15 years working on sophisticated alternative investment strategies at HSBC and Goldman Sachs before going out on his own, said that while Ballast asset management business will be available to assist the private wealth business, the RIA will focus on building fully diversified portfolios that include traditional investments.

The launch of an RIA specializing in alternative investments for wealthy clients is in line with the trend identified in the recent report by CAIS and Mercer that showed a growing demand for alternative investments along with a growing supply from the asset management industry.

The RIA has already attracted $30 million worth of client assets with another $20 million committed, Carroll said.

“Exchanging some of your large-cap U.S. equities for diversified private equity can be a very attractive exchange of risk if you can manage less liquidity,” he said. “Our focus has always been identifying the most attractive risk-adjusted returns while understanding and incorporating a client’s liquidity needs. Without financial planning, you can’t understand a client’s liquidity needs.”