US Capital Global, a private investment company operating in the USA and headquartered in San Francisco, has forged a partnership with Equity Trust, one of the leading custodians in the country that operates in alternative investments exceeding $100 billion in value.
Through this collaboration, independent RIAs will gain access to institutional-quality private market investments such as private credit, structured finance, and private equity through tailored custody, cash management, and onboarding services.
The collaboration addresses a long-standing operational challenge associated with the private wealth management industry: custody friction. Although there has been growing demand among clients for non-correlated alternative income solutions, independent RIAs find it difficult to allocate capital towards illiquid private assets since public equity custodians cannot manage unlisted securities. Advisors can include private market deals in client portfolios while keeping their current primary custodian, clients, and fee structures intact using the collaboration between US Capital Global Securities’ broker-dealer and Equity Trust’s alternative custody.
“Advisors deserve a simpler way to incorporate alternative investments into client portfolios one that preserves the relationships they have built, the revenue they earn, and the way they already serve their clients,” stated Jeffrey Sweeney, Founder and Chairman of US Capital Global. “Our goal is to provide independent RIAs with the custody infrastructure, investment opportunities, and operational support they need to meet that growing demand.”
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Dual-Custody Solution Design and Curation
Typically, in the past when advisors invested client money in private credit and private equity opportunities, they had disconnected manual paperwork, complicated capital calls and huge reconciliation problems. Most clearinghouses and custodians will either charge very expensive custody fees for physical securities or do not accept unlisted assets at all, thus preventing RIAs from engaging in private placement deals that could be highly profitable.
To solve these operational challenges, there is a unique three-tier delivery model:
Dual-Custody Architecture: Advisors can keep using their traditional custodial service providers like Schwab and Fidelity for listed equities and ETFs, and meanwhile leverage the capabilities of Equity Trust as the custodian for the private placements.
Curated Private Credit & Private Equity Pipeline: US Capital Global Securities performs due diligence, underwriting and curation of alternative investments, focusing on income-oriented private credit and growth equity.
Administrative Lifecycle Support: Equity Trust takes care of subscription management, cash management, regulatory filings, and valuations for private deals.
Strategic Impact on the Investment Management Industry
Unifying specialized alternative asset custody with institutional-grade deal distribution accelerates structural shifts across the Investment Management landscape:
1. From 60/40 to Multisector/Hybrid Models
Historically volatile equity-bond portfolio allocations have become even more so, and the need for more stable yield from private markets is driving wealth managers towards durable yield in private markets. With turnkey alternative custody capabilities, RIAs can allocate 10%-25% of clients’ funds into private credit and real assets using endowment-style allocation. This makes alternative asset allocations not just a necessity for mega-family offices but a regular part of portfolios for middle-market wealth management.
2. Increasing Capital Formation for Middle-Market Companies
Alternative lending, in particular private credit, is becoming a critical source of financing for small to middle-market companies that cannot get bank loans. Access to private credit offerings for independent advisor networks gives growing businesses access to more capital outside of institutional investors. Making thousands of independent RIAs a capital syndicate makes it easier for middle-market companies to get alternative financing compared to syndicated loans market.
Transforming Revenue Models and Business Operations for RIAs
The partnership establishes clear financial and operational benchmarks for advisory firms, asset managers, and FinTech service providers:
1. Increasing FRE from Private Debt & Equity Yield and Preserving Margins
Index-based and robo-advised portfolios have squeezed the margins for traditional portfolios. Offering yields on private debt and structured equity gives RIAs the ability to showcase alpha performance and sustain the 1% AUM advisory fee margin. Moreover, by incorporating previously held-out private assets on billable custody platforms, RIAs increase billable AUM, thereby increasing recurring fee income.
2. Significantly Cutting Down RIA Operating Costs
Manually managing alternative investments for clients results in countless hours spent in reporting and auditing. Using automation on alternative custody through Equity Trust allows boutique RIAs to increase business without employing more staff.
3. Improving Client Retention and LTV
High net worth individuals often look to access private transactions that are not offered at their current RIA, resulting in leakage. By giving independents access to alternative investments, RIAs can make sure that clients’ money remains with their organization.
Conclusion
The collaboration between US Capital Global and Equity Trust marks an important maturation point in private capital distribution. By eliminating the administrative divide between alternative assets and independent advisors, the partnership closes the gap between private issuers and wealth allocators. For the broader investment management industry, this announcement confirms that the future of wealth advisory depends on making private market investing operationally effortless, accessible, and revenue-accretive.
