Despite the effects of the 2008 recession and the tight grip it has had on Wall Street operations, new investment firms continue to spring up, coming out of the old to bring on the new. And why is this? Even though starting up a brand new firm is a very difficult undertaking, many financial advisors and investment strategists want to bring new ideas or go in a different direction than the company they currently work for is going in. Maybe they’ve even seen the company use tactics that they feel are dishonest or undermine transparency to their investors, and they wish to change that and bring about a company that implements fair practices and is investor-focused.
One of the most recent investment firms that spun off a major investment bank was Entrust Capital, started by three former Goldman & Sachs advisors including Mark Fife, Gregg Hymowitz and Michael Horowitz. Currently this new firm only manages about 125 investor portfolios with about 20 companies they fund including Citicorp, but small firms and spin-off companies have risen to success quickly. Such firms include Highland Capital Management in Dallas TX and CCMP Capital, both of which started out under major financial firms but stepped out to grow their own client base and assets and make their own financial decisions.
While usually the clients with the higher ranked income and less risky profiles are the most attractive to these firms, some have begun to implement investment programs that allow people in the middle of the middle class to build retirement portfolios. That’s because the firms are starting to recognize that there are funds to be gained in that demographic and by giving them some smaller funds to buy into, there are greater chances for building up the assets. What investors are looking for when they start building a portfolio is not just how much they need to buy in, but they also want companies and advisors that they can trust, and who have a track record of making solid investments. Most firms offer the traditional stocks, bonds, and other equities market investments, but some of these new firms also implement alternative investments to give investors some different choices on where they can place their funds.