Looking for separate account management alternatives? Prima Capital, which provides research, due diligence, and manager evaluations and rankings, is worth considering. The Web-based service is unlikely to get traction with small advisory practices because it’s pricey, but if you have $50 million or more in separate accounts or represent a B/D or consortium of advisors, the high quality of the due diligence and ongoing research could make a lot of sense.
J. Gib Watson III, the president and founder of Prima, started building the service in 1997 when he was at KPMG Peat Marwick, and it was initially intended for use by 400 KPMG consultants. In 1999, KPMG spun the product off to Watson after he raised a $1.5 million in capital. Watson later raised another $750,000 and now, he says, Prima is operating profitably, with a customer base comprising about 100 advisors and several institutions, including one of the nation’s top five banks, a large national accounting firm, and a few B/Ds, trust companies, and mid-sized investment firms.
Watson says there are about 5,000 products in the separate account manager universe. By screening them down to products managed by firms with demonstrated track records, the universe that would actually be considered by high-net-worth individuals is composed of about 500 products. For instance, for the Prima database to include a product, it likes to see its manager have at least $250 million under management and at least $50 million in the product.