Michael Sidgmore – Alternatives Go Mainstream (Private Wealth 1, EP.443)
May 5, 2025
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Michael Sidgmore, Co-Founder of Broadhaven Ventures and creator of the Alt Goes Mainstream podcast, shares insights into the booming world of alternative investments. He discusses how traditional and private wealth channels are merging to meet changing investor demand. Sidgmore delves into the evolution of private markets, innovative strategies in wealth management, and the increasing appeal of evergreen structures. He highlights the crucial role of technology and brand identity in shaping the future of finance and how these shifts are impacting both investors and the industry at large.
The rapid evolution of private markets is increasingly allowing private wealth investors to access alternative strategies previously limited to institutional environments.
Innovative investment structures like evergreen funds are transforming liquidity options for private market investors, making them more appealing to individual investors.
The convergence of institutional and wealth management styles necessitates enhanced capabilities from wealth managers to meet the sophisticated demands of high-net-worth clients.
Deep dives
WCM Investment Management's Unique Approach
WCM Investment Management differentiates itself from competitors by prioritizing a culture of innovation and long-term thinking, which is rooted in a belief that being based on the West Coast helps avoid Wall Street's groupthink. Their focus on integrating culture research into investment strategies and promoting wide moat investing, particularly through the concept of moat trajectory, allows them to build concentrated portfolios that stand out in the market. This approach has enabled WCM to achieve consistent differentiated returns, capturing attention from investors seeking alternative strategies. By dismantling outdated investment practices and fostering a growth-oriented mindset, WCM aims to inspire each member of its team to excel within the investment landscape.
Shifts in Private Wealth Portfolios
Historically, private wealth portfolios allocated a significantly lower percentage of assets to alternatives than institutional investors, averaging only 2-5% compared to the 20-50% range seen in larger organizations. However, this trend is rapidly changing, as innovations in investment structures provide individual investors with easier access to alternative strategies previously reserved for institutions. In 2022, private banking and wire house platforms committed around $110 billion to funds, nearly double the investments made by major institutional investors. An estimated shift of just 1% in asset allocation from private wealth to alternatives could potentially introduce $500 billion into the market, indicating a substantial opportunity for growth and adaptation in investment strategies.
Convergence Between Institutional and Wealth Investing
The convergence of institutional investing styles with private wealth management is reshaping the landscape, prompting significant interest from both sides. Wealth managers, particularly large wire houses and independent firms, are increasingly allocating capital into private markets, mirroring the sophisticated approaches utilized by institutional investors. This trend necessitates that traditional wealth managers enhance their capabilities, creating new structures and investment opportunities that meet the demands of high-net-worth clients. As wealth management evolves, firms are beginning to recognize the importance of understanding private market dynamics to better serve their clients’ long-term investment needs.
The Role of Education and Branding in Private Markets
As private wealth investments grow, educating both advisors and clients on private markets becomes essential for fostering trust and translating complex concepts into actionable insights. High-quality content and strong branding play a critical role in attracting investment dollars, as firms like BlackRock and Schwab successfully leverage their established names to gain confidence from potential investors. Smaller firms are encouraged to cultivate unique identities and invest in marketing strategies to differentiate themselves within an increasingly crowded marketplace. The integration of educational initiatives will help demystify alternative investing for a broader audience while enabling firms to maintain strong relationships with their clientele.
Emerging Structures for Liquidity in Private Investments
New investment structures like evergreen funds, interval funds, and tender offers provide private market investors with unprecedented liquidity compared to traditional drawdown funds. These innovative products enable investors to benefit from the returns of private market investments while offering periodic redemption options that meet the liquidity needs of individual investors. The trend toward these alternative structures may facilitate more significant capital inflows into private markets, making them accessible to a wider audience. This shift will require asset managers to adopt refined operational strategies and frameworks that allow them to effectively manage investor expectations and deployment challenges in this evolving landscape.
Michael Sidgmore is the Co-Founder of Broadhaven Ventures and the creator of the Alt Goes Mainstream podcast, which explores the intersection of private markets, technology, and wealth management. His career spans early roles at Goldman Sachs and iCapital, experience building businesses in fintech and asset management, and investing across the private market ecosystem.
Our conversation offers an in-depth introduction to the intersection of private markets and private wealth. We discuss the origins of Alt Goes Mainstream, the rapid evolution of private markets, the convergence of institutional and wealth channels, and the rise of evergreen structures and new distribution models. We close with Michael’s perspective on how the wave of capital flowing into private markets from private wealth will impact investors, and on the importance of content, brand, and community in shaping the industry’s future.
