Gridline, the technology platform for access to alternative investments that launched last month, announced Tuesday that it raised $9 million in its first funding round, which includes funding from venture capital, private equity and real estate funds, as well as entrepreneurs and executives. investment is included. The startup hopes to use the funding to double its headcount next year, adding to its investment, sales and marketing teams.
“We are targeting an AUM of $2 billion over three years to build one of the fastest growing wealthtech platforms of all time,” Logan Henderson, founder and CEO of Gridlines, said in a statement.
Some investors included former AT&T CEO David Dorman; Former Managing Director of the University of Texas Investment Management Company and Stanford Management Company Mark Schoberg; Terminal CEO Tim Kopp; and Aaron Stone, Senior Partner at Apollo, to name a few. GC&H Investments, Ardent Venture Partners, Tech Square Ventures and BLH Venture Partners also invested.
The demand for access to private placements among advisors and clients has increased significantly over the years, as investors seek uncompromising returns across traditional asset classes to diversify their portfolios. According to a recent Prekin report, alternative assets are expected to rise to about $13 trillion in 2021, and the firm expects this to grow to $23 trillion by 2026.
But there are several barriers to entry for small investors, Henderson said, not least in the complexity of investing in the first place. Gridlines has worked to automate back-office processes, including performance and tax reporting.
Gridlines offer two types of investment. The first is a traditional feeder fund, a deposit investment vehicle that feeds a single manager.
The second is Gridline’s thematic multi-manager products, which provide similar diversification to traditional fund funds. These are structured as closed-end funds and the gridline assigns five to 10 underlying managers managing the capital. Gridlines is a source of funding and due diligence.
According to Henderson, these funds will provide access to early- or late-stage ventures, low or middle market buyouts and opportunistic real estate strategies. Some will be available to qualified buyers, while others will be available to accredited investors. The minimum starts at $100,000, although some products will have a minimum closer to $250,000.
Gridlines charges a simple asset under management fee of between 50 and 100 basis points on the total assets managed on its platform. It does not charge carry interest.
To be sure, there are other alternative investment platforms focused on serving retail financial advisors. iCapital, for example, works with the world’s 200 largest alternative GPs; It has $105 billion in total assets invested through the platform, used by more than 8,500 advisors. Another platform, CAIS, works with over 4,400 advisory firms/teams that have transacted over $15 billion since its inception. CAIS recently received $225 million in new capital, raising the firm’s valuation to over $1 billion.
