FLX Distribution, the distribution platform started by former AMG Funds executive Brian Moran, has added its first asset manager clients, with collaborative efforts between fund firms that have different expertise coming down the pipeline in the near future.
Firms that join the FLX platform are able to tap human capital in distribution and marketing, ranging from fund wholesalers to PR firms, who join the platform to build up their own independent books of business working for different asset managers.
The company launched at the beginning of this year and recently inked a partnership deal with SS&C Technologies.
From today, boutique managers Stadion Money Management and RiverNorth Capital Management – which manage around $3bn apiece – along with wealth manager Blue Square and Ballast Equity Management, are active on the FLX platform.
For asset managers joining, there are three main options in terms of how they work with FLX. The first is a build to scale endeavor, where they tap the platforms available distribution pros and FLX’s consulting services to grow their intermediary footprint or start one from scratch.
Second, fund firms can use the platform for supplemental distribution efforts, such as pushing a specific product or assisting with getting a new launch off the ground.
Last, is a merge option, where some or all of an asset managers’ sales team joins the FLX platform, continuing to work for their old employer but with the freedom to take on work from elsewhere.
I would say that the majority of larger firms we are talking to all fall into the supplemental bucket.
“This group is a mixture of merge and build … they all wanted to grow, looked at this, and decided this was the most realistic way based on their market position and stage of their life cycle,” Moran said.
He added that none of the initial four was driven to engage FLX by the pandemic, and that “no one directly in the pipeline has said they’re talking to us because of the pandemic.”
In terms of the larger asset managers Moran and his team – which has recently expanded – are in talks with, Moran explained that those conversations will take longer to come to fruition.
“The larger the organization, the more complicated the discussion, because there’s a lot of moving pieces. I would say that the majority of larger firms we are talking to all fall into the supplemental bucket,” he said.
The next tranche of firms signing up with FLX, Moran explained, will be those using what he described as “pre-packaged pods.”
That is effectively where FLX helps fund firms combine with others in order to form a multi-boutique for distribution purposes. For instance, a fixed income boutique and an equity boutique could combine, and share a national accounts manager they hire through FLX, in order to sell their funds as a packaged solution.