CAIS builds out investment solutions suite with new capital markets division

CAIS has introduced a capital markets division aimed at consolidating and expanding its services in defined-outcome investment strategies. The move comes amid rising demand from financial advisors for tools that help balance risk and return in volatile markets.

The new unit, CAIS Capital Markets, brings together the firm’s existing capabilities in structured investments, hedging and monetization solutions, and managed solution referrals. The division also incorporates trade execution services previously handled by CAIS Capital.

“Advisors are increasingly taking advantage of defined-outcome strategies to capitalize on market opportunities, manage risk, and seek to achieve the financial objectives for their end clients,” Marc Premselaar, partner and head of capital markets at CAIS, said in an announcement Monday. “In today’s market environment, we’re seeing a preference for increased diversification and downside protection.”

Advisors using the platform will now have streamlined access to structured notes, as well as tools for risk mitigation in portfolios with concentrated equity holdings. These products are underwritten by a range of top-tier bank issuers and are designed to help advisors tailor outcomes around yield, growth, or principal preservation goals.

The new division also offers integrated trade execution support, covering processes from initial structuring through to the maturity of the investment. These capabilities are housed within the CAIS ecosystem, allowing advisors to align structured strategies with other alternative asset classes.

Structured investment volumes on CAIS have seen notable growth in recent years, according to the company. Last June, the platform reported a 46 percent year-on-year increase in the number of advisors with allocations to structured notes in Q1 2024. Around that time, CAIS said Osaic deepened its partnership with CAIS, choosing the alts platform to power its structured note offerings.

In a more recent joint survey with Mercer, CAIS found two-fifths (38 percent) of advisors had plans to bump up their allocations to structured notes in the coming year.

CAIS currently supports over 2,000 wealth management organizations that collectively serve more than 50,000 advisors. Those firms represent an estimated $6 trillion in client assets under management.

Along with its new capital markets division, CAIS said Focus Financial Partners has deepened their involvement with the platform by tapping into the expanded capital markets offering.

“We are thrilled to expand our partnership with CAIS and leverage their experience across structured investments and technology,” said Joel Hirsh, principal and co-chief investment officer at Kovitz, a Focus Partners firm.

Hirsh highlighted the opportunity for advisors to address clients' yield, growth, and protection objectives "through a centralized, streamlined process."

Despite their utility, structured notes have also been the subject of some alarm among regulators. In September, registered broker-dealer First Horizon Advisors faced charges from the SEC, which alleged it breached Regulation Best Interest standard through a failure to collect customer data needed to review structured note recommendations for compliance purposes.

In its statement of exam priorities for 2025, the SEC also indicated its exams of broker-dealers would focus on "products that are complex, illiquid, or present higher risk to investors," including structured products.

But recent upheaval at the agency could put a question mark on that. Apart from last week's senate confirmation of Paul Atkins as SEC chair, reports indicate a massive downsizing effort happening at the commission, with hundreds of employees across the enforcement, examination, and legal divisions said to be departing in the coming near term.