Upstart RIA uses access to alternatives to recruit advisers

Third Seven Advisors leverages its own investment bank

Jun 28, 2018 @ 2:51 pm

By Jeff Benjamin

A fledgling New York-based financial advisory firm aims to make a big splash as a consolidator by baiting the hook with access to sophisticated investments.

Third Seven Advisors, which has absorbed two advisory practices for a total of nearly $800 million in assets under management since its January launch, on Thursday announced an ownership stake in a company that specializes in international investment transactions.

UDIS Capital Partners will integrate with both the Third Seven advisory business and Third Seven Capital, an investment bank that operates under the parent company Third Seven Group.

"What we're building is national advisory firm that is competing with other aggregators and rollups," said Amit Dogra, a founder and chief executive of the advisory business and partner in the investment bank.

At a time when consolidation in the advisory space is running at record levels, Mr. Dogra said he intends to leverage Third Seven's access to alternative strategies to attract more sophisticated advisers.

"It's not about the size of the practice, it's about the sophistication of the adviser and the client," he said. "You have to have an appreciation for alternative investments."

Louis Diamond, executive vice president of Diamond Consultants, said it is "definitely unique" to lure advisers with access to more sophisticated and difficult-to-access investment products and strategies.

"In speaking with a lot of wirehouse advisers, they don't get any sort of deal flow like this," Mr. Diamond said. "In the wirehouses, a lot of advisers were lured in with promises of access to sophisticated investments, but it is often split among so many advisers that the benefit is lost."

Mr. Dogra said the investment bank reviews between 10 and 20 deals per week, and "turns down 99% of them."

But when an investment opportunity is attractive enough to pass muster by the investment bank, he said access is offered to advisers affiliated with Third Seven.

Through the investment bank, Third Seven will be able to offer access to investments such as pre-IPO deals and private-equity investments, Mr. Dogra said.

"It's a virtual circle, and it all feeds off each other," he said. "When we find something interesting we offer it to our advisers first, because they will be offered full access to the deals we're looking at."

While the creation of Third Seven was in the works for more than a year prior to its official launch in January, it brought on two firms within a four-week period between February and March.

In mid-February, Oklahoma City-based Synergy Advisors Group joined Third Seven Advisors, adding the first $200 million to the RIA.

About three weeks later, Boston-based multifamily office SB Investment Partners joined the fold, bringing along $575 million.

"We're off to a great start," Mr. Dogra said. "Our original target was to cross the $1 billion threshold this year, but now we're already talking about doubling those assets this year."

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