Alternative investment consultants are being snapped up by general investment consultants, a growing trend that some fear could result in increasing conflicts of interest and an insufficient number of specialist firms.
Consulting is a tough business with increasing pressure to lower fees. To grow their business, alternative investment consultants already have been moving into more lucrative money management.
This latest episode of consolidation is catching the attention of asset owners, primarily due to the increased possibility of conflicts should the much-bigger company press the alternative investment consulting group to sell lucrative investment products over advisory work, industry insiders say.
Alternative investment consultant acquisitions in the past 12 months include:
nGeneral consulting firm Pavilion Financial Corp. acquired alternative investment consulting firm Altius Holdings Ltd. in September. Pavilion already purchased Sacramento, Calif.-based private equity consultant LP Capital in 2014. Pavilion now has $60 billion in alternative assets under advisement.
nSeattle-based consultant Verus Advisory Inc. closed its acquisition of San Francisco-based private equity consulting firm Strategic Investment Solutions on Dec. 31, 2015. The combined firm has responsibility for more than $380 billion in assets under advisement. Eight months earlier, Verus started bulking up its alternative investment capability when it contracted with hedge fund and private credit consulting firm Aksia LLC to gain access to its hedge fund investment team and due diligence reviews.