Operational model for advisor service

Welcome back to the Alt Goes Mainstream podcast.

Today’s episode brings the perspective of an asset management veteran who has sat on both sides of the table.

We sat down in Franklin Templeton’s New York City office with George Stephan, COO of Global Wealth Management Alternatives at Franklin Templeton.

George joined Franklin to continue the buildout of the firm’s Alternatives capabilities, which boasts over $264B AUM in private markets strategies that include Lexington Partners, Benefit Street Partners, and Clarion Partners. George came from KKR, where he was Head of Strategy and Business Development for the firm’s Global Client Solutions business and was also COO and Head of Investor Relations for KKR’s Global Wealth Solutions business in the Americas. Prior to KKR, George spent nine years in Morgan Stanley’s wealth management division. George is also a Board Observer at CAIS.

George and I had a fascinating conversation about how to build a wealth solutions business and how advisors approach private markets. We discussed:

• How has the adoption of private markets by the wealth channel evolved over the course of George’s career?
• The benefits and challenges of being a traditional asset manager building out its private markets capabilities.
• The breadth and depth of Franklin Templeton’s reach as a firm and how that brand and history have helped Franklin partner with the wealth channel in private markets.
• How has Franklin Templeton’s family of specialists enabled the firm to leverage the expertise of specialist alternative asset managers within a larger platform?
• How does the wealth channel approach private markets?
• How will model portfolios be constructed and adopted by the wealth channel?
• Will evergreen funds be the structure of choice for most advisors?

Thanks George for coming on the show to share your expertise and wisdom at the intersection of private markets and private wealth.

Show Notes
00:00 Introduction to our Sponsor, Ultimus

01:55 Welcome to the Podcast

02:03 Guest Introduction: George Stephan

03:59 George's Career Journey

04:12 Building Wealth Solutions at Franklin Templeton

06:06 Key Pillars for Success in Wealth Management

07:31 Client Service and Operational Excellence

09:04 Strategic Approach to Wealth Management

10:15 Convergence of Public and Private Markets

10:48 Advisor Needs and Solutions

13:31 Franklin Templeton's Private Markets Business

14:23 Unifying Private Markets Business

15:01 Cross Collaboration and Investment Decisions

15:43 Cultural Alignment in Acquisitions

16:35 Franklin Templeton's Core Principles

17:15 Heritage and Long-Term Thinking

21:30 Brand Evolution and Market Perception

24:19 Strategic Partnerships in Private Markets

25:56 Future of Partnerships and Acquisitions

26:57 Winners and Losers in Partnerships

27:10 Advisor's Perspective on Productization

27:43 Allocating to Public and Private Markets

28:21 Innovation in Private Markets

29:05 Challenges and Opportunities in Wealth Management

29:56 The Future of Multi-Asset Solutions

30:17 Operational Complexity in Private Markets

31:27 The Need for Digital Transformation

31:59 Adoption of Distributed Ledger Technology (DLT)

32:46 Evolving Technology in Wealth Management

33:49 Impact of Market Efficiency on Returns

35:13 Dispersion in Private Markets Performance

37:17 Scale and Investment Integrity

38:44 Building Capabilities in Franklin Alternatives

40:10 Partnering with Asset Managers

41:36 Keys to Building a Wealth Solutions Business

42:16 Hiring for Private Markets Expertise

43:39 Educating the Industry on Private Markets

45:48 Evergreen Structures in Private Markets

49:45 Exciting Trends in Private Markets

Editing and post-production work for this episode was provided by The Podcast Consultant.

A word from AGM podcast sponsor, Ultimus Fund Solutions

This episode of Alt Goes Mainstream is brought to you by Ultimus Fund Solutions, a leading full-service fund administrator for asset managers in private and public markets. As private markets continue to move into the mainstream, the industry requires infrastructure solutions that help funds and investors keep pace. In an increasingly sophisticated financial marketplace, investment managers must navigate a growing array of challenges: elaborate fund structures, specialized strategies, evolving compliance requirements, a growing need for sophisticated reporting, and intensifying demands for transparency.

To assist with these challenging opportunities, more and more fund sponsors and asset managers are turning to Ultimus, a leading service provider that blends high tech and high touch in unique and customized fund administration and middle office solutions for a diverse and growing universe of over 450 clients and 1,800 funds, representing $500 billion assets under administration, all handled by a team of over 1,000 professionals. Ultimus offers a wide range of capabilities across registered funds, private funds and public plans, as well as outsourced middle office services. Delivering operational excellence, Ultimus helps firms manage the ever-changing regulatory environment while meeting the needs of their institutional and retail investors. Ultimus provides comprehensive operational support and fund governance services to help managers successfully launch retail alternative products.

Visit www.ultimusfundsolutions.com to learn more about Ultimus’ technology enhanced services and solutions or contact Ultimus Executive Vice President of Business Development Gary Harris on email at gharris@ultimusfundsolutions.com.

We thank Ultimus for their support of alts going mainstream.