Moelis and Veritable launch seed investment platform

The firm has partnered with wealth advisor and investor Veritable to launch Archean Capital Partners, which will seek to provide initial funding for private funds.

Wealth management firm Veritable and Moelis Asset Management, an affiliate of investment bank Moelis & Company, have partnered to launch investment platform Archean Capital Partners, which will provide initial capital for new portfolio managers.

A Veritable spokesman told Private Equity International that Veritable provides the primary source of manager diligence for Archean, but as a true partnership, Veritable and Moelis will have equal voice in the investment and management decisions.

According to a person familiar with the matter, Veritable and Moelis will split the ownership by half, and an investment committee and a management committee with equal representation of both firms have been established.

The new venture will also provide advice and the necessary infrastructure to these portfolio managers, according to a statement from the firms issued on Wednesday. Investments will be provided through a series of single-manager special purpose vehicles with the main goal to help a newly-created firm reach a first close on its fund.

The Veritable spokesman told PEI Archean plans to ultimately raise a multi-manager vehicle, adding that Archean seeks to be the first limited partner, but will selectively consider early commitments.

Archean – which draws its capital from Newtown Square, Pennsylvania-based Veritable’s ultra-high-net-worth clients; from New York-based Moelis Asset Management; and from Moelis & Co. – will support managers with funds in buyout, turnaround and restructuring, growth, credit, infrastructure and real estate, according to the statement.

Archean has drawn $100 million of commitments from the three main sources for its first SPV, and is currently in the process of investing in its first manager, the statement said. According to the Veritable spokesman, about $80 million of that amount came from Veritable's investment consulting clients.

Veritable declined to disclose the manager receiving Archean’s first funding. Moelis declined to comment.

According to a regulatory filing with the US Securities and Exchange Commission from 22 December, Veritable partner Charles Keates and Moelis Asset Management managing director Chris Ryan are leading Archean Capital Partners I. The document also indicated this fund received 170 individual commitments.

Moelis & Co.’s private funds advisory group is serving as the placement agent for this undisclosed manager to receive other commitments to its fund.

Founded in 2004, Veritable invests in various asset classes on behalf of its nearly 200 ultra-high-net-worth families, including private equity, private real estate, infrastructure and hedge funds. The statement said it made its first alternative strategy investment in the late-1980s, and manages more $13 billion in assets.

In January 2016 the managing directors and investment team of Moelis’s former mid-market private equity subsidiary, Moelis Capital Partners, launched an independent firm named NexPhase Capital, according to Moelis Asset Management’s website. Moelis Asset Management remains the parent of Moelis Capital Partners and its funds.

Moelis Asset Management is also the parent company for several other alternative asset management firms, including direct lender Freeport Financial Partners and credit manager Gracie Asset Management. It manages more than $3 billion in assets, the statement said.