Addepar, Inc is a privately held investment management cloud-based technology company that offers an integrated financial software platform. It was co-founded by Joe Lonsdale (current Executive Chairman of the Board) and Jason Mirra in September 2009, and its headquarters is located at Mountain View, California.
Antonio Garcia, a member of Addepar's Board of Directors, once said, "The idea of a common language and a truly data platform for the financial services would be something Wall Street 10 years ago could never have imagined." The idea behind the launch of Addepar is to transform financial services. Much of the technology infrastructure that Wall Street was using was built 20 to 40 years ago and required a large amount of money for maintainance; hence, it was not efficient and effective enough to store, process, and analyze big data sets after the financial crisis. Creating a much more modern platform and using that platform to power the global financial system was the main driver.
Addepar has raised $240 millions from a Secondary Market funding round from investors such as 8VC, Valor Equity Partners, Capital Factory, Craft Ventures, Haitao Capital and Harald McPike. With the new capital, the firm will continue investing significantly in expanding its product, platform and tech-enabled services, and R&D.
In the ultra high net work community, it has been a challenge to provide investors and their investment advisors with pricing and performance information on assets that are in multiple institutions, many of which do not price regularly. Making timely porfolio management decisions based on complex data is not easy, and most of the tools financial institutions rely on fail to deliver because those tools are dominated by errors associated with manual data entry, single side status reporting, and ineffective analytics tools for clients' sophisticated porfolio.
Addepar is bringing data, people, technology together to help clients make better and more informed investment decisions. The wealth management platform empowers investors and advisors to navigate the increasingly complex world of investment management with tools such as data aggregation and reconciliation, customizable reporting, analytics, and API & integrations. This purpose-built modern technology helps people who have a responsability to make investment decisions, especially for large portfolios, to do it in a more confident and data-driven way.
The company's platform centralizes financial information by automating and streamlining performance reporting and communication and eliminating time spent on manual processes to spend more time actually doing investment analysis, advising and building stronger client relationships while keeping everything private and secure.
In addition, most of the time investment managers do not have a clear picutre of a half percentage of their porfolio including illiquid assets, taking as example of the fianncial crisis of 2008 again. Even worst, most of the information was stored in filing cabinets and Excel that has limited analytics tools and storage capability for big data. With Addepar, investment managers can see their entire portfolios in a single system in a unified way that accurately captures perfomance and risk by encapsulate any type of assets and going deeply into positions and transaction history.
The company's intended customer are family offices, wealth advisors, and private banks. It tailors its services to better accomodate each customer. For family offices which used to use Excel before, the platform gives more possibility to make more informed decisions by providing robust data model, analysis and reporting tools to navigate through complex ownership structures and help save time and money. For wealth advisors, the platform helps the client to create a competitive advantage by eliminating the manual burden of aggregating finacial information, generating customized reports in seconds, and freeing up more time to spend on designing and advising on client investment strategies. Lastly, there are mostly partnerships with private banks to optimize and streamline their technology strategy in order to reduce cost of ownership, support distributed teams, attract and retain top talent, and so on.
As above mentioned, one competitive advantage of Addepar is aggregating and analyzing any asset class from any custodian in a private and secure way. Addepar can knit together some of the underlying bits of technology like CRMs and financial planning tools while others cannot, and it approach of reaching the end user differs the firm from others. Addepar has an experience portal and mobile app that each firm that licenses the platform can curate and creat their own views. This way boostes trust and customers' experience of our clients' clients. However, the price for Addepar is significantly higher than other tech platforms, but what the clients are getitng is everything in one. The real value will be noticed in the future.
Addepar adapted various technologies, libraries, or languages to create its financial platform.
- The firm uses Amazon Web Services features into its system architecture as a Service solutions; features like software-defined networking and elastic scaling of resources are being used.
- For simplicity and to enable developer productivity, the most recent version of Java is used to develop all of Addepar's services.
- Also, utilizing Facebook's Buck build tool for incremental builds, TestNG support with test result caching, 3rd party dependency management, and native Python support.
- Python is the primary scripting language for solving lightweight problems, often related to automation of build and test infractructure, ad-hoc data normalization, performance testing, and API development. Python is also used for configuration management and currently leveraging the Salt ecosystem.
- It relies on HashiCorp's Vault infractructure for security configuration settings as passwords, API Keys, and SSL certificates.
- The firm stores the data in the original form as received and the transformed form produced by the firm's data processig pipeline in MongoDB.
- Data is in MySQL as a finalized form.
- It utilizes NGINX for load balancing, fault tolerance, and zero downtime deployments.
- Using Zookeeper, a highly reliable distributed cooordination server, for its built-in Kafka's coordination power for persistent message queues, data replication, and fault tolerance; also for its Zookeeper's Curator library to solve advanced problems like distributed locks and service naming.
- At the frontend, the web application is built using EmberJS and JavaScript.
Addepar belongs to investment management domain in managing buys and sells of assets for investment porfolios.
The FinTech is rapidly shaping investment management industry. First, a vast majority of investment managers view the impact of FinTech as the need to adapt to changing customer needs. Customers, especially millenials, significantly demand different experiences and see improvements what have done in the past. Firms in the investment management domain have mainly been focusing on data analytics and automation, typically associated with robo-advisors, to improve customers' satisfaction.
The revolution of digital financing is dirupting all financial institutions but at the same time providing new venues for growth and revenue. Mobile app is the faster place for the businesses to build new channels. Nowadays, consumers constantly demand to have the digital experience that integrate technology with personal relationship in order to save time and unnecessary expenses. This comes in digital assistants that involves advanced AI technologies for voice recognition, and virtual assistants are replacing humans in bank call centers responding questions regarding fees, products, technical issues, and so on. Indeed, integrating chatbots into the customer service systems increase clients' loyalty, reduce the processing time, and cut administrative costs.
- Enfusion
- Morningstar
- Carta
- Investment Account Manager
- Interative Investor
- Black Diamond
- Orion
The business impacts of Addepar are far beyond imagination. It is for sure disrupting the traditional ways to manage investment porfolios but also creating values for clients by providing a clearer financial picture to asset owners and advisors at every level, all in one place. With customizable reporting, financial advisors can visualize and communicate relevant information to parties in need through a secure, scalable, and fast financial platform. It has been replacing traditional data storage software like Excel and access, and accounting software like QuickBooks and ERPNext.
One way to measure success for is to see the value of assets on the company's platform. Addepar manages data for over $1.3 trillion of assets on its platform compared to its main competitor, Orion's $1 trillion. Another way of measurement will be if the firm has extra cash to reinvest in its software that simbolizes liquidity, and Addepar certainly does. It will soon implement enterprise SaaS and compromise higher touch experiences though technological transformations.
In addition, Addepar has partnered with other tech and services providers such as Salesforce Financial Services Cloud, FolioDynamix, iCapital Network, Citco Fund Services, RedBlack Software, Blaze Porfolio, Quovo, Morningstar, BaySys Technologies, and Morgan Stanley. Morgan Stanley awarded Addepar for recognition of a FinTech company that has had a significant impact on Morgan Stanley's mission to continously innovate for its clients and businesses in 2017.
I would suggest to implement Blockchain technology to transform the asset management value chain to obtain competitive advantage for early adoptation. Investment management leaders should position themselves for the future where blockchain and smart contracts will become the most convenient and secure way for acquiring financial instruments while tightening the process and mitigating some of the risk.
How great thing will be if Investment management firms have a shared ledge system where tracking assets in serialization and making operations seemless. It will provide full end-to-end visibility that can avoid any discrepancies and potential risks on a timely manner.