Goldman Sachs and CAIS announced on Tuesday a joint venture that will bring Goldman’s institutional-level structured products to independent advisors and the registered investment advisor channel.
The venture on the CAIS-X online alternative exchange is already up and running, making Goldman’s structured products available to indie advisors and RIAs at no additional cost. CAIS now serves about 100 RIAs, and while there is no cost to join the platform, the firm is seeking to grow selectively by vetting prospective clients.
“Through the CAIS exchange, we can generate many custom conversations and allow an RIA to have a bespoke conversation with Goldman Sachs and customize a specific product,” said CAIS co-founder and president Rafay Farooqui (left) in an interview on Wednesday. “We’re embedded in the product revenue stream at Goldman, and we streamline the operational efficiencies for the RIAs we take on.”
Farooqui started his career at Goldman Sachs and spent much of his time there in alternative investments. As a result, he said, when working out the CAIS deal with Goldman, the two parties found an easy fit. And structured products are a natural extension of CAIS’ existing offering of pre-qualified hedge funds, private equity funds and precious metals,” Farooqui added.
“When we were thinking about starting a structured products group at CAIS, the driving force was RIAs and positioning with a firm that had the right product set and intellectual capital," he said. "We clicked right away with the Goldman Sachs Private Investor Products Group. It was a mutual meeting of the minds."
The products available to advisors on CAIS were previously only available to institutional investors and Goldman Sachs Private Wealth Management clients.
“We are pleased to be partnering with CAIS, which has a strong reputation and relationships within the registered investment advisor community,” said Bill Shelton, managing director within Goldman Sachs’ Private Investor Products Group in the Americas, in a statement. “Their unparalleled technology-driven process and institutional framework delivers quality financial products to the fragmented wealth management industry, and will complement the products and capabilities we offer through the structured products group.”
In 2009, CAIS launched its global alternatives exchange, known as CAIS-X, which provides advisors with a platform for conducting due diligence, analysis and trading of alternative investments. Once an order is placed, funds are held with custodians including Fidelity, Pershing, TD Ameritrade and Charles Schwab. Advisors receive regular diligence reports through Mercer.
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Read more about CAIS in Alternatives on the March: Bringing Private Vehicles to Public Space from the December issue of Investment Advisor at AdvisorOne.
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