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Jane Leung Mike Sobel
Scenic Advisement's Jane Leung and Mike Sobel

Boutique Investment Bank Scenic Advisement Launches Wealth Management Arm

Clients were looking for a nontraditional wealth advisor to help them manage their shares in private companies and more.

Scenic Advisement, a boutique investment bank that caters to founders, employees and investors of private technology companies, is getting into the wealth management business.

The San Francisco-based bank specializes in the primary and secondary transaction of private shares, which are inherently illiquid. It’s a service for a niche clientele but one increasingly in demand. More technology companies are choosing to stay private longer, creating more circumstances in which shareholders might want to liquidate some or all of their holdings, rather than wait for a payday from an initial public offering.

Since co-founding Scenic Advisement in 2013, Mike Sobel said the investment bank has helped clients execute about 40 transactions valued at almost $1 billion.

But after many clients received a large sum of money for selling their private shares, they were turning around and asking Scenic to recommend a financial advisor. The investment bank was already familiar with their clients’ private holdings, so expanding its offerings to include a full suite of wealth management services was a logical move.

The services Scenic Advisement provides to wealth clients include: asset assessment, comprehensive financial planning, trust and estate services through partnerships with law and accounting firms and bill pay and tax preparation. The bank can also advise a client on their philanthropy and insurance. 

Sobel, who previously was the Americas head of Equity Trading and the global head of Fixed Income Index and iShares at BlackRock, said Scenic Advisement’s wealth unit already has begun working with a number of the investment bank’s clients.

Jane Leung, who was appointed by the bank to head the wealth management business, said clients of the investment bank were telling the firm they didn’t want a traditional wealth manager.  

While managing private-company holdings is common practice for financial advisors, Leung said shares in technology companies, and the market for them, are often mishandled. Determining the current and potential value of private shares is tricky, especially those of technology companies that can quickly balloon.

The company is tight-lipped about its customers, but Sobel said one client came to Scenic Advisement after his financial advisor suggested he sell his private shares in LinkedIn prior to the social network’s initial public offering. In hindsight, Sobel said, the client missed an opportunity to get more from his shares, either at a better price in the private market or in keeping his holdings through the IPO.

Private shareholders also don’t always liquidate their entire holdings at once. They might choose to cash in periodically out of need or advantageously, which Leung and Sobel said make it inseparable from wealth management.

“There is a space there that Scenic [Advisement] and others have identified and it’s better for all parties involved,” said Jon Avina, a partner at Wilson Sonsini Goodrich & Rosati whose practice focuses on corporate, securities, governance and related matters for technology companies.

Avina has worked with Scenic Advisement on a number of transactions.

He also said not long ago, companies more widely looked down upon private shareholders selling their stakes. That isn’t the case anymore. Companies are fully aware of interests in people selling their private shares and some even help facilitate a sale.

“Playing matchmaker” can be a pain for companies and some welcome the involvement of an investment bank, Avina said.

Private technology companies are frequently approached by investors wanting to give them capital in exchange for a part of ownership. But companies are not always in need of cash, or as much as an investor is willing to offer. In those cases, companies might work with a bank like Scenic Advisement to help shareholders value and transact shares on their behalf to others. 

In those circumstances, investment banks often work closely with the companies and are given access to private information to help them value shares.

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