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Addepar, Inc.
Company typePrivate
IndustryFinancial technology
FoundedSeptember 2009; 15 years ago (2009-09)
FoundersJoe Lonsdale
(Executive Chairman of the Board)
Jason Mirra[1]
Headquarters303 Bryant Street,
Mountain View, California
,
United States
Number of locations
4 (2016)
Area served
Worldwide
Key people
Eric Poirier (CEO)[2]
Daniel Bookstaber (COO)
Nancy Hilker (CFO)
ProductsAddepar Platform
Open API
Services
AUMUS$800 billion[3]
Total assets (2016[4])
Number of employees
200[5] (2016[5])
Websiteaddepar.com

Addepar, Inc. is an American investment management technology company that offers an integrated financial software platform to single and multi-family offices, wealth advisors, large financial institutions, endowments and foundations, funds and fund administrators for financial data aggregation & reconciliation, investment portfolio analysis, and client reporting needs.[2][6]

History

Origins

In 2003, Joe Lonsdale began working at Peter Thiel's hedge fund Clarium Capital Management after graduating from Stanford University.[7] At Clarium Capital Management, Joe Lonsdale consulted on Thiel's early Facebook investment and across Clarium Capital Management's investment holdings.[7] At Clarium Capital Management, Joe Lonsdale observed that companies in the investment industry relied upon Microsoft Excel software's spreadsheets to manage and track billions of dollars in investments across asset classes.[7]

In 2004, Joe Lonsdale left Clarium Capital Management and co-founded Palantir Technologies,[8] a company that builds software to enable the unification of datasets so that, for example, intelligence analysts' can run queries for surveillance and monitoring and financial institutions can identify fraud.[7] In 2009, Lonsdale transitioned to an adviser and stopped working full-time at Palantir to launch Addepar in 2009.[7]

2009: Formation

The company was incorporated as Addepar, Inc. in September 2009.

RIABiz reported Addepar as shaped in Palantir Metropolis "in its data collection and focus on human-technology interactions" and with "roots" in Joe Lonsdale's experience at PayPal.[8]

The Wall Street Journal reported that in 2009 many advisors were manually updating spreadsheets in the process of keeping tabs on their investment and range of assets.[9]

Addepar was co-founded by Palantir co-founder Joe Lonsdale and an ex-employee of Palantir Jason Mirra in 2009[10] in response to Lonsdale's view that financial instruments were becoming increasing complex resulting in investment advisors and family wealth managers being at a disadvantage to larger banks.[9]

That same unification of datasets from Palantir and respective running of queries ability is what underlies Addepar to service investment industry and manager's to track and manage assets in stocks, artwork, real estate and investments in venture capital funds.[7]

2010–2012: Early years

Addepar was primarily composed of "scores of 20-somethings" "straight from universities like MIT and Stanford".[11]

2012–2013: RIA focus

In 2012, Addepar expanded its target clients to include RIAs despite industry skepticism reported by RIABiz.[12] To this focus, RIABiz reported that Addepar in 2012 was "beginning to roll out a sales and marketing force to bring in the big clients."[12] In doing so, Addepar and Advent's Black Diamond were competing for the same RIA customers.[8] In 2012 RIABiz described Advent as "arguably the leading software company for RIAs depending on how you weight assets, advisors and cutting edge technology."[13]

In March 2012, Newsweek reported that Addepar sought to reinvent the "infrastructure that powers global wealth" management.[14]

In 2013, Addepar focused on expanding risk analytics and their client portal.[1]

In October 2012, Bloomberg Businessweek reported that Joe Lonsdale was running Addepar "attempting to modernize the software that ultrawealthy families and foundations use to manage their billions."[7]

2013–2014: Management transition

In February 2013, Addepar lowered its pricing, focused on building relationships with custodians RIABiz reported that "industry leaders pointed out that it was time for the hot shot firm to grow up."[11] In 2013, Addepar sought to transition out of start-up mode and hired a new CEO and COO to start building out the company's management.[11] In January 2013 Eric Poirier previously of Palantir is hired and in July of that year became CEO.[11] Karen White who had been CEO and chairman of the board at Syncplicity in 2013 was hired as president and chief operating officer.[11] In 2014, Micheal Paulus (Addepar 2011-2014) who had served as president prior to Karen White's hiring and whom RIABiz reported as having "been the primary face of Addepar, deliverer of its message" departed.[11]

From 2009 through 2012, Addepar grew without a sales and marketing department with clients' coming from referrals of early investors in the company.[8] In 2013, Addepar hired a head of sales from its competitor Advent (Black Diamond) who at the time was "widely considered the industry leader according to RIABiz.[11] During 2013, Addepar's primary competition Black Diamond, Tamarac and Orion "pulled away in the battle for RIA market share, with each of the brands adding about 50% to their asset administration totals".[11]

2015–Present

In September 2015, BloombergMarkets reported that Eric Poirier's strategic direction with Addepar "a startup that provides wealth management software, aims to get banks beyond spreadsheets."[15]

Products and services

Bloomberg reported in 2017 that Addepar is a "software provider that tracks and analyzes exposures across portfolios."[16]

Addepar Platform

As Joe Lonsdale co-founded Addepar and Palantir Technologies; some of the first algorithms behind the Addepar platform were collaborated on by early Palantir employees.[9]

In 2012, Fortune reported that Addepar was connecting family offices and endowments to their respective investment managers and third parties managing their assets "facilitating fund transfers, generating speedy reports, tracking currency conversions, and cutting down on data-entry errors."[17]

Addepar is a cloud based solution.[18]

The Addepar software facilities both visualizing an investment portfolios’ exposures at the individual asset class and also tabulating the portfolio’s total value according to realtime value of the assets under management.[19]

In 2014, the Wall Street Journal reported the Addepar platform as providing investment advisors "a dashboard to track the performance of many types of asset classes in one place. With a few clicks, a user can instantly see their exposure to the Japanese Yen, for example, or their 10-year rate of return measured against the price of gold or the Standard & Poor’s 500 index."[9]

In April 2015, Addepar released a fully browser-based version of the platform.

In 2016, Crowdfund Insider described the Addepar Platform as "a financial operating system".[6]

Open API

In September 2016, Salesforce.com announced their partnership with Addepar for Salesforce's Wave Financial Services Cloud to facilitate financial advisers with the analytic tools to see across disparate and siloed asset classes producing a single visual whole for the client.[6]

In October 2016, Addepar released their Open API to provide clients and integration partners what Crowdfund Insider explained as "a programmatic solution to tie Addepar’s data and calculations into a multitude of other products and systems."[6]

Current operations

In October 2016, Crowdfund Insider reported that Addepar had over 200 clients representing more than $560 billion assets on its platform.[6][4]

Clients

Single & multi family offices[20]

Known users include Iconiq Capital, a large independent multi-family office that advises and manages assets for former Zynga CEO Mark Pincus,[21] as well as Facebook executives including advising Mark Zuckerberg.[8]

By 2016 family office Crow Holdings was a client.[6]

Wealth management firms

Legacy Venture and founders of Three Bell Capital who were reported by RIABiz as previous users of Black Diamond and Advent and now use Addepar described Addepar’s data aggregation and rapid calculations positively.[12]

Investment advisory firms[20]

By 2016 investment advisory firms Tiedemann Wealth Management and Dynasty Financial Partners were clients.[6]

Financial institutions

By 2016 Jefferies Group was a client.[6]

In January 2017 Reuters reported that 20 Morgan Stanley financial advisory teams were using the Addepar platform "to help them see more of their wealthiest clients assets."[22]

Clients

Clients
Year # of Clients
2017
2016 200[6]
2015 115[6]
2014
2013 ~36[23]
2012 ~24[8]
2011
2010
2009

Finances

Funding

In 2014, the Wall Street Journal reported Addepar had raised $50 million in a venture round of financing led by Valor Equity Partners and David O. Sacks who perviously was COO at PayPal and later founded Yammer.[9][24] Investors include Peter Thiel and Founders Fund.[21]

By late 2014, the Wall Street Journal reported total funding raised as $66M with David Blumberg's Blumberg Capital and Dovi Frances' SGVC as investors too.[9]

In 2014, Bloomberg News reported that in 2014 Panorama Point Partnership LP invested in Addepar.[25]

In 2013, Addepar shares were reported by TechCrunch as one of the top five new companies in SecondMarket’s 2012 Q3 report.[26]

Fees

Addepar had charged clients 0.05% of assets managed and sometime before 2013 switching to a fee structure seeing clients paying "several hundred thousand dollars per year" contingent to their assets.[17] In 2014, the New York Times reported Addepar charged clients dependent on the quantity of data reviewed for their respective account; with "Addepar’s service typically started at $50,000, but can go well over $1 million, depending on the money and investment variables involved."[21]

Revenue

In 2012, Fortune reported that Addepar for the year generated $12 million.[17]

Assets on platform
Assets on platform
Year (USD)
2017 $800 billion[27]
2016 $560 billion[4][22]
2015 $300 billion[28]
2014
2013 $75 billion[18]
2012 $50 billion[12]
2011
2010
2009

Corporate affairs

Corporate structure

Corporate leadership

CEOs

Since founding in 2009

  • Eric Poirier (July 2013–present)[11]
  • Joe Lonsdale (2009–2013)

Employee growth over time

Employees
Year # of Employees
2017
2016 200[5]
2015 130[28]
2014 100[9]
2013 80[23]-81[18]
2012 65[8]-75[17]
2011
2010
2009

Notable former employees

Corporate citizenship

Since 2014 Addepar has attended the Grace Hopper Celebration of Women in Computing organized by the Anita Borg Institute for Women and Technology.[29]

Corporate identity

Corporate culture

RIABiz reported in 2014 that "Addepar offers employees three-day laundry service, the chance to play the sport of cricket and the paying of housing stipends to assure that its employees can afford to live in towns where Google and Yahoo! employees tend to bid up rents — and avoid big energy-draining commutes to cheaper bedroom communities."[11]

Office locations and headquarters

Addepar NYC Office at 335 Madison Ave.
  • Mountain View, California and New York City, New York

Logo design

Design

Addepar Creative

Print magazine in 2015 recognized Addepar Creative's BUILD 2014 campaign in their 2015 annual design awards.[30]

Differentiation from competitors

Industry

The Addepar software market and competition are those companies that use Excel spreadsheets and existing industry financial management software that Bloomberg Businessweek reported in 2012 "can’t combine different types of assets in a single view" with Addepar having developed "ways to organize assets into a consistent format and displays the information with the gloss of a consumer Web app."[7]

Portfolio management and reporting industry firms and products include Addepar, Betterment, Black Diamond’s Performance Reporting,[13] Blueleaf, Envestnet’s Advisor Suite,[13] FinFolio,[13] Fortigent, InfoVisa's Maui, Innovest Systems' InnoTrust, Interactive Advisory Software (IAS),[8] InvestEdge, Morningstar Office,[13] Orion Advisor Services,[31] Pershing PES, Principia CAMS, Schwab's PortfolioCenter,[31] SEI Wealth Platform, SS&C’s Advent APX & Advent AXYS,[8] Tamarac Advisor Xi Suite (acquired in 2012 by Envestnet),[18] TrustDesk, Viabinary's Open Portfolio Warehouse and XI Technologies' AssetBook.[13]

Addepar in 2016 established partnerships with iCapital Network and administrator Citco.[6]

Market Composition

In 2014 The New York Times compared Addepar to a recently acquired subsidiary of Advent Software; acquired in 2011 for $73M ($98.9 million in 2015) called Black Diamond.[21] The report noted that both companies use "cloud technology to increase its computing power and more easily draw from several databases at once."[21]

Criticism and controversy

Industry analysts and competitors have also expressed doubts about Addepar’s goal of creating one complete, integrated solution. Dave Welling, general manager of Black Diamond, has criticized Addepar’s approach, arguing that advisors want to make their own combinations of software, and need custom-tailored rather than one-size-fits-all solutions.[12] Later in 2014 Black Diamond's CEO Pete Hess during a CFA Society Conference said "we definitely respect" Envestnet and Addepar when responding to a question about competitors.[32]

Housing benefits program

Business Insider reported that Addepar, Palantir, Facebook and Salesforce.com have been criticized for their programs to subsidize employee housing if employees live within a defined proximity to their San Francisco headquarters due to encouraging employees to spend more time at work and increasing housing rents in the area.[33] Business Insider reported there is no consensus as to whether or not this contributes to gentrification of neighborhoods claimed by the chief executive officer, John Liotti, of East Palo Alto community advocacy group Able Works.[33] In defense of Addepar's $300 a month program head of people Lissa Minkin said explained the program allowed for employees to allocate more time to their families and personal interests; specifically "not having a long commute makes a huge positive impact on maintaining a healthy work-life balance."[33]

References

  1. ^ a b Hampton, Dina (8 March 2013). "10 Most Influential RIA Figures Going Into 2013 and How They're Reshaping the Industry, Part 1". United States: RIABiz. RIABiz LLC. Retrieved 13 February 2017.
  2. ^ a b Feintzeig, Rachel (15 June 2016). "Male CEOs Detail Their Work-Life Rules". No. Eastern edition. New York, N.Y., United States: Wall Street Journal. Dow Jones & Company Inc. p. B1. Retrieved 21 December 2016.
  3. ^ "Addepar Announces Record Third Quarter Performance, Expands Leadership Team".
  4. ^ a b c Son, Hugh (10 January 2017). "Morgan Stanley Signs With Asset-Gobbling Startup Backed by Thiel". United States: BloombergMarkets. Bloomberg L.P. Retrieved 19 February 2017.
  5. ^ a b c Silverman, Rachel (21 July 2016). "Companies Use Smartphones to Deliver Mental-Health Help". No. WSJ. Australia: The Australian. Nationwide News Pty Ltd. p. 24. {{cite news}}: |access-date= requires |url= (help)
  6. ^ a b c d e f g h i j k Hobey, Erin (26 October 2016). "Addepar: With $500B in Assets & New Salesforce Partnership, Launches Open API". United States: Crowdfund Insider. Crowded Media Group. Retrieved 29 December 2016.
  7. ^ a b c d e f g h Vance, Ashlee (18 October 2012). "Addepar's Software for the Super-Rich". United States: Bloomberg Businessweek. Bloomberg L.P. Retrieved 30 January 2017.
  8. ^ a b c d e f g h i O'Mara, Kelly (10 June 2012). "Addepar means to be the only technology platform RIAs will ever need -- and has MIT minds and PayPal money to back it up". United States: RIABiz. RIABiz LLC. Retrieved 13 February 2017.
  9. ^ a b c d e f g Macmillan, Douglas (13 May 2014). "Addepar Raises $50 Million for Wealth-Management Dashboard". No. Eastern edition. New York, N.Y., United States: Wall Street Journal. Dow Jones & Company Inc. Retrieved 1 June 2015.
  10. ^ "Addepar Names CEO, President and COO". No. Manufacturing Close-Up. United States: Close-Up Media, Inc. Close Up Media, Inc. 20 July 2013. {{cite news}}: |access-date= requires |url= (help)
  11. ^ a b c d e f g h i j O'Mara, Kelly (23 March 2014). "The Face of Addepar Leaves the Company Amid Intrigue About Just Where It Stands With the RIA Market". United States: RIABiz. RIABiz LLC. Retrieved 21 February 2017.
  12. ^ a b c d e O'Mara, Kelly (26 November 2012). "Addepar Hits $50 Billion of Assets and Turns Its Eyes to Advent-Black Diamond's Plump Ria Market". United States: RIABiz. RIABiz LLC. Retrieved 20 March 2013.
  13. ^ a b c d e f Southall, Brooke (22 July 2012). "Why the San Francisco Bay Area Is Almost Certainly the Capitol of the RIA Business". United States: RIABiz. RIABiz LLC. Retrieved 13 February 2017.
  14. ^ Cox, Rob (19 March 2012). "The Ruthless Overlords of Silicon Valley". Newsweek. No. Vol. 159 Issue 12. IBT Media. pp. 36–39. Retrieved 28 December 2016. {{cite news}}: |issue= has extra text (help)
  15. ^ Collins, Margaret (3 September 2015). "Four Entrepreneurs Talk About the Fintech Revolution - 'It's All Just Data'". No. October. United States: BloombergMarkets. Bloomberg L.P. Retrieved 22 February 2017.
  16. ^ Tan, Gillian (17 January 2017). "Morgan Stanley Manages Just Fine". No. Gadfly. United States: Bloomberg News. Bloomberg L.P. Retrieved 19 February 2017.
  17. ^ a b c d Lashinsky, Adam (11 September 2012). "Money management, Silicon Valley-style". United States: Fortune. Time Inc. Retrieved 27 December 2016.
  18. ^ a b c d Shidler, Lisa (21 January 2013). "Top 12 Crucial Technology Happenings Affecting RIAs in 2012, Part 2". United States: RIABiz. RIABiz LLC. Retrieved 13 February 2017.
  19. ^ Collins, Margaret (7 August 2015). "A How-To Guide for Opening Your Own Wealth Management Firm". No. September. United States: BloombergMarkets. Bloomberg L.P. p. 14. Retrieved 13 January 2017.
  20. ^ a b Foxman, Simone (13 May 2015). "Stan Druckenmiller Sees 'Massive' Problem Caused by Aging". No. Technology. United States: Bloomberg News. Bloomberg L.P. Retrieved 19 February 2017.
  21. ^ a b c d e Hardy, Quentin (4 August 2014). "Wealth Managers Enlist Spy Tools to Map Portfolios". No. New York. New York, N.Y., United States: New York Times. The New York Times Company. p. B1. Retrieved 22 December 2016.
  22. ^ a b Dilts, Elizabeth (11 January 2017). "Morgan Stanley partners with Addepar to see more of clients' wealth". No. Money. United States: Reuters. Thompson Reuters. Retrieved 3 March 2017.
  23. ^ a b O'Mara, Kelly (24 February 2013). "Addepar Slashes Prices, Opens Up Its Architecture and Shows RIA Custodians Some Love as It Confronts Market Realities". United States: RIABiz. RIABiz LLC. Retrieved 19 February 2017.
  24. ^ McBride, Sarah (4 December 2014). "AvantCredit Raises $225 Million From Tiger Global, Peter Thiel". United States: Business Insider. Business Insider Inc. Retrieved 25 January 2017.
  25. ^ Collins, Margaret (16 June 2014). "Billionaire Skoll's Ex-Manager Opens Private-Equity Firm". United States: Bloomberg News. Bloomberg L.P. Retrieved 22 February 2017.
  26. ^ Cutler, Kim-Mai (9 November 2012). "Consumer Electronics Make Up 75% Of SecondMarket's Third Quarter Transactions, Social Media Down To 1.2%". United States: TechCrunch. AOL Inc. Retrieved 20 March 2013.
  27. ^ "Addepar Announces Record Third Quarter Performance, Expands Leadership Team".
  28. ^ a b Southall, Brooke (23 April 2015). "Addepar Lays Out World-Fixing Vision and Rolls Out Upgrades at Swanky the Battery Event in San Francisco". United States: RIABiz. RIABiz LLC. Retrieved 19 February 2017.
  29. ^ "Grace Hopper Celebration". Anita Borg Institute. Anita Borg Institute. Retrieved 28 December 2016.
  30. ^ "Regional Design Annual 2015: Far West - Print Magazine". No. Winter 2015, Vol. 69 Issue 5. United States: Print. F+W. 2015. p. p31-57. Retrieved 28 December 2016. {{cite news}}: |page= has extra text (help)
  31. ^ a b Southall, Brooke (19 June 2012). "Schwab Moves to Keep 3,500 Desktop-Bound RIAs From Walking Onto Somebody Else's Cloud". United States: RIABiz. RIABiz LLC. Retrieved 13 February 2017.
  32. ^ "Advent Software Inc at CFA Society of Minnesota's InvestMNt Conference - Final". No. Quarterly Earnings Reports. United States: Fair Disclosure Wire. 8 June 2014. {{cite news}}: |access-date= requires |url= (help)
  33. ^ a b c Oran, Olivia (17 December 2015). "Facebook will give employees $10,000 if they move within 10 miles of its headquarters". United States: Business Insider. Business Insider Inc. Retrieved 25 January 2017.
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