Custom portfolios at scale: From idea to infrastructure

This article is produced in partnership with Pathstone Holdings.

Customization has become a priority in modern portfolio management. Yet most firms struggle to deliver it with the depth and consistency investors expect. Concentric Innovation is trying to change that.

For Ralph Studley, Chief Revenue Officer at Concentric, the challenge is both technical and structural. His background blends municipal bond trading, institutional portfolio management, and leadership roles across asset management and distribution. It’s that combined view of how portfolios work in practice and how advisors need to operate in real time, that drew him to Concentric’s precision-focused model.

“I was approached by the leadership at Pathstone Holdings, LLC to look at this interesting company to join as a partner and to help grow and scale the business,” Studley recalls. What he saw was a framework built to connect tax structure, client constraints, and portfolio execution into a system that gives advisors both control and clarity.

The architecture of precision

Concentric’s portfolio engine was built internally, led by President and Chief Investment Officer Rahul Agrawal, whose dual background in investing and technology shapes the firm's approach. Rather than adapting off-the-shelf platforms, Concentric’s system was designed to address a specific gap in the wealth market.

The foundation of Concentric’s thinking is embedded in its name. “When you think about the name Concentric and why, it really does start at the industry level in terms of what's happening and how people are trying to build balanced portfolios for wealth creation or preservation,” Studley explains.

And the firm is adamant about what precision really requires.

“It breaks down to the individual tax lot,” he says. “You can have multiple tax lots of one holding that you’ve acquired over time through either dollar cost averaging, opportunistic buying, or even if you're an employee who receives shares on a regular basis.”

Those layers of holdings, accumulated over time, often carry different tax characteristics, exposures, and constraints. That complexity is normally invisible until rebalancing or liquidation exposes the tax implications hiding inside each account. “When you get down to those individual tax lots and the complexity that surrounds tax optimization of just one tax lot of one security… making sure that you have precise oversight and execution becomes extremely important.”

Studley sums it up clearly: “While we can’t promise perfection, we think the word precision means a lot in terms of managing risk, striving to make sure that execution is proper, tax optimization is right, and you're rebalancing correctly. All of the components of modern portfolio management today.”

That vision led Concentric to build its own platform, one that can automate what’s now manual, scale what used to be bespoke, and enforce discipline around execution. “That's not something we bought off the shelf,” Studley says. “We built our own proprietary framework, and we continue to update and manage it.”

Direct indexing is not the finish line

The discussion around direct indexing has grown in recent years, yet adoption remains uneven. “Less than a quarter of wealth managers are using it¹,” Studley notes. That gap signals both hesitation and opportunity.

Rather than viewing direct indexing as an end in itself, Concentric treats it as one element in a broader evolution. “If you can achieve benchmark performance and generate better after-tax returns, it becomes an appealing prospect for clients,” Studley says. “But what if you could take the same approach and apply it across an entire portfolio of managers, funds, or ETFs?”

Studley notes that delivering benchmark-level returns with only one to two percent tracking error, while still outperforming the index after taxes, is an attractive proposition. The platform is built to apply that approach not only to equities or indices but to multi-asset portfolios that include funds, ETFs, and active strategies.

Oversight by design

That’s where Concentric believes the conversation is headed: customized implementation that respects the design of the portfolio while improving its tax profile. And it’s why the firm caught the attention of Pathstone, the $170 billion-plus wealth management platform that acquired Concentric into its fold². For advisors, the value is not only in tax-aware execution but in the time reclaimed and the consistency of outcomes. That capability, as Studley sees it, changes how advisors can manage scale.

Scale is not just a function of speed; it’s a function of safety. When a system manages thousands of portfolios and millions of tax lots, its controls matter more than its feature set. Studley points to this early in the process. “There are a number of safeguards built into the system, from portfolio reconciliation to daily reviews and exception monitoring.” That approach starts before trades are placed and continues through feedback loops in the system that flag discrepancies, risks, or conditions that require intervention.

The rise of precision in portfolio management signals a shift. As portfolios become more personalized, managers need infrastructure that can support it at scale. Concentric’s model reflects that reality: tax-aware logic, daily oversight, and operational clarity at every level of investment.

That commitment to customization isn’t just about serving end clients; it’s also about removing the burden on advisors who have been forced to piece together tools and processes that were never meant to operate at this level.

Footnotes

_{¹ Cerulli Associates, "Direct Indexing Assets Close Year-End 2024 at $864.3 Billion" (April 10, 2025)}

_{² "Pathstone Family Office LLC ($116B) plus affiliate firms ($55B). As of June 30, 2025. Includes regulatory assets under management, assets under advisory, and assets under administration."}