It’s been little more than a year since AlTi Global CEO Michael Tiedemann merged his New York–based RIA and alternative asset management firms, Tiedemann Group and TIG Advisors, with London-based asset manager, merchant bank and global multi-family office Alvarium Investments and took them public via a special purpose acquisition company.
Valued at $1.2 billion with $60 billion in combined assets under management, the deal created what Bloomberg called “one of the world’s biggest publicly traded money managers that focuses on the ultra-wealthy.”
After raising $450 million from private equity investors Constellation Wealth Capital and Allianz early this year, AlTi quickly followed up with the third U.S. acquisition in Tiedemann’s 25-year history—a New York City firm managing more than $6 billion for nine families and nine charities.
Tiedemann took some time to speak with WealthManagement.com last week about going public in a challenging market, the need for additional capital, how that capital will be deployed, and what AlTi is focused on as it builds out a uniquely global multi-family office currently overseeing more than $70 billion in collective assets.
The following conversation has been edited for brevity and clarity.
WealthManagement.com: Tell me a bit about what led up to the deal to go public via a special purpose acquisition company early last year.
Michael Tiedemann: We began the wealth business in 2000 to address what we thought was really an institutional failure on behalf of families and on behalf of clients, which was a lot of embedded conflict, a lot of turnover of key people, inflexibility of service model, et cetera.
So, we focused on keeping the good parts of the word ‘institution,’ like the permanence—that’s an important word for us and a governing ethos of all parts of our business. We ensure that as a well-structured and well-run firm with a really client-oriented offering, but without the turnover, conflicts or inflexibility.
We did that as a private firm with a long runway, but my partners and I were watching all the acquisitions and all the private equity money being raised and we knew that selling the business was not something we wanted to do.
As we evaluated the future, one of the paths to creating a permanent organization that would last beyond the current leadership, arguably the hardest path, was through public markets and really creating that permanent structure.
We also really felt it was important that, as we were adding offices in various global jurisdictions, very large families would be able to have transparency into the business. When they’re evaluating a counterparty, they can see that we’re listed and have a governance structure, and they can vet us as they would the bank in many ways.
Very much complementary to the wealth platform is everything we’re doing in real estate and alternatives, GP staking, co-investing, all of that. There’s a huge demand for those activities and being able to have a differentiated, more direct and cost-effective approach or ownership approach in the form of GP stakes.
There’s really a great complement between all these activities and all of it is really long-term. We have long-term relationships with our clients, and the capital decisions we’re making are very long dated.
WM: The deal to join forces with Alvarium and Cartesian Group was announced at a really tough time for the markets and capital costs, and around the same time other large wealth managers were headed in the opposite direction. Did you ever have second thoughts?
MT: There’s no question there were things that were out of our control. If we were thinking of it as a hundred-meter dash, I think it turned into sort of a 200-meter dash—and there were some hurdles.
We came up with the concept of doing this in November of 2020, so it was a pretty long cycle between then and when we closed the deal in January 2023. The SPAC environment went from a structure to a bubble structure, then to one that the SEC was trying to shut down. Capital base rates went from zero to 5½. We had a good year, but 2022 was nevertheless challenging in the markets.
We did not raise capital through the SPAC but were really able to do everything else. We merged and integrated the three businesses in 2023, created a governance structure and accomplished the listing. And then now, this most recent Allianz and Constellation Wealth capital raise was really that; we’ve now raised capital to be able to really expand our opportunity set and execute on the opportunities in front of us.
WM: What’s different about being a public company?
MT: Obviously, a very big difference is having a public company board and their governance responsibilities versus a private board, which is more advisory in nature. Another is obviously all the transparency that comes with everything. There’s the stock itself that trades, or may trade, on less fundamental reasons, but it’s important to understand that we didn’t pursue this path for a short-term solution or fix. We pursued this path for a long-term solution and very aspirational set of goals based on what we believe we can build.
A year in, no one thought it was going to be easy and no one promised it would be easy—and it’s not easy. It’s a very heavy lift. There’s a cost to going public, and specifically, there’s a cost to being a global public company. There are a lot of regulators; there’s a lot of finance function and SOX compliance that we’re building up.
Public company readiness and public company cost is a very real dynamic. Firms should be mindful of what they need to go through and should probably be conservative and add to whatever their number or timeframe is when evaluating whether they’re ready for it.
WM: Before we get into your latest deals, can you tell me a bit about how the wealth management unit is organized? Do you have affiliated advisors or are they all W-2?
MT: We are an integrated wealth platform. That’s very important, and I would say it’s distinct in terms of the fact that we have a centralized investment team that’s global.
We obviously have different investment structures based on jurisdiction, domicile and currency, but we have profiles that are similar. We’ve tried to create on and offshore entities, for example, to go into private equity or alternatives generally, or real estate deals. We have to make sure that the structures work for the end client, but it is one, unified wealth management platform.
WM: Is that to reap more of those benefits of scale?
MT: And the scale needs to accrue to the clients. That’s really something we’ve spent a lot of time on, and we’ve thought through from a client standpoint.
We can understand it from a management standpoint. If you have a dynamic organization that’s growing, you can attract talent and retain talent because there are new roles that develop to create career paths. And obviously retaining good people benefits the client.
But ultimately, you get more pricing power that should flow through to the client. They should be investing in cheaper products of the same quality or better quality. Your access should also improve reinvestment into the systems and reinvestment into the operating organization that, over time, should improve the offering to the clients. There’s a lot that we focus on to make sure scale ultimately benefits our client base.
WM: Let’s talk about 2024. You’ve raised capital and done the third U.S. acquisition in your history, a New York firm serving less than a dozen clients with multiple billions under management. Are we going to see more of these deals stateside?
MT: Allianz and Constellation Wealth Capital are two organizations that bring really helpful strategic components, not just capital, and have really well-balanced strategic input into the firm.
Allianz is one of the best-run global financial services and asset management firms in the world. They have an incredible franchise globally, but specifically throughout Europe and Australasia. I think that will just be very helpful to us with everything from networking to credibility when you’re going into a market, deal flow, idea generation and organic client introductions.
Constellation is U.S.-oriented and has an incredible network here. We believe that will be very helpful with networking, talent recruitment and some firm recruitment on the wealth management side.
Very importantly, we are all seeking excellent financial results for their investment, for sure.
Most of our growth has been organic, which we’re very proud of, and so we’re very selective when it comes to M&A. This is important because we really commit to integration and there’s an important risk component to integration, i.e., compliance systems and process and controls.
There really aren’t a lot of firms like East End Advisors. We are oriented around the very highest end of the market. The quality of the team, the quality of their business, the quality of their engagement with their clients and the duration of those trusted relationships are all really, really important to us and EEA is quite unique and rare. We’ve competed against them, we know them and have a lot of respect for them.
And their intent in working with us was important. Anytime you are evaluating a human capital organization—this can even be a fund on the GP stakes side—we want to see an orientation around growth that we believe we can help accelerate. Maybe there’s a valid generational transition and we’re helping with that execution but, if they’re looking to exit the business, they’re not the right group.
That said, we absolutely are going to be looking to grow, and that may be into a new city or densifying an office where we already exist and there’s a talented group or an organization that wants to join us. There’s no question that’s the purpose of the growth capital.
WM: What about international opportunities? I know that you recently did deals in Singapore and Switzerland. Where else are you looking overseas and what opportunities are you seeing?
MT: The opportunity overseas has different dynamics, and we think they’re exciting to consider. There just aren’t any firms with our footprint, inclusive of the U.S., Asia and Europe, that offer advisors serving large families the ability to operate across those jurisdictions seamlessly, save for the banks. Our competitive landscape is maybe one organization in Italy or France, the UK, or Switzerland, but there aren’t any organizations really that cover that canvas and that have the same operating and investment models tailored to the very, very high end of the market.
We are essentially a multi-family office service and investment model. We have the ability to operate single family offices or serve as the platform for them, saving them a lot of money. We have the investment architecture that’s streamlined and centralized. Again, I believe a lot of other organizations have bolted on firms and aren’t quite as integrated as we tend to be. We have on and offshore trust capabilities, we have thriving impact investing and family governance structures. We have a lot of ways to serve very large families and we have a lot of capital co-invested alongside, as a firm; the principals and shareholders of the business have a lot of capital co-invested alongside our clients, which in itself is I think quite unique.
When you're working with a big bank, maybe based in London or New York, most advisors have to stop dealing with their clients when they move to another jurisdiction. There’s no teamwork, there's no ability to collaborate. That’s just the model, and we have one that’s much more collaborative. We have cross-border clients where they and their advisor sit overseas but are served by a trust down in Delaware. There’s a lot of cross-border activity that’s just beginning to develop, but our biggest competitor outside of the U.S. is the banks.
WM: What kind of goals have you set, either for yourselves or in collaboration with your new capital partners?
MT: There are a couple things that govern that. I'm not going to be too specific, but there’s no question that we model pipeline opportunities; we model valuation realities that change by geography, size or margin, whether it’s alternative or wealth.
What we think is really exciting, and I know this is shared by our partners, is that because of our footprint and because of our capabilities in alternatives and wealth management, we are able to look at opportunities wherever they reside. And there are valuation gaps that exist.
So, there’s a fair amount to evaluate and a fair amount of flexibility in terms of really not being opportunistic, but really having the ability to pick and choose where it fits best with our organization, where we have the greatest needs or the greatest growth opportunities, being respectful of the human capacity that we have to execute transactions. These are all things that get considered, but we have a really wide canvas from which to create.
WM: What kind of crossover opportunities exist between the alternatives and wealth management businesses?
MT: We view this as an important message internally. Externally, we believe there are some really important mega trends. Six, to be specific. 1. The changing face of finance; 2. The climate crisis; 3. Reindustrialization; 4. Technological change; 5. Aging demographics; and 6. Social polarization.
Take climate for example. That has an impact, but it’s also a highly scalable industrial private equity investment opportunity. So, it is an impact investment and clients care greatly about climate, whether it be carbon neutrality or more general solutions, but it’s also much bigger than just impact as a sleeve. That is a global opportunity set to explore and one we share with our partners.
So, as we’re evaluating how we’re going to allocate capital to the wealth company, we’re also evaluating the ability to buy a GP stake in a really great operator in a space like that. And so, we have capital that’s aligning with ownership, and then we have distribution and we might take an opportunity there, and we might even have industrial introductions via Allianz in various regions.
For the wealth manager, we are a capital source and a strategic capital investor into the business because we want to help take that business that they’ve grown to X billions of dollars and we think we can double or triple it. Our clients can benefit as a GP or LP and a co-investor, and that’s really distinct and something that our large families like to see.
And that's really our angle. We try to use all the network we have collectively and the IP that we collectively generate to come up with these long-term themes that we want to allocate capital to. And we also want to be an operator in driving growth. Obviously, that leads to profits and revenues and recurring revenues, which is ultimately what public markets care about.
WM: It's been a lot of change over the last year or two. So where do you see yourself once everything has kind of calmed down in, say, five years?
MT: We're continuing to simplify and streamline our business. I think that's the key thing, but we want to remain dynamic.
Things that are non-dynamic typically don't last, so we’re going to be competitive and dynamic and really work to understand what the long-term trends are and how we can best participate to serve our clients in the best way possible. These are all things that we're constantly asking.
We’re going to continue to operate as a public company and we think we’ll do it increasingly well. Some of our explicit goals include operating with more efficiency, retaining our people and being very proud of the business that we build. But we want to continue to grow, and we'll continue to, but the rate of change won’t be as drastic.