Orion Advisor Solutions made headlines last month with the blockbuster acquisition of Brinker Capital, a turnkey asset management platform (TAMP). The deal brings Orion’s combined TAMP assets under management to $40 billion.
Orion offers access to the TAMP as part of its end-to-end wealth management platform, while Brinker’s $25 billion TAMP dates to 1987. The deal is one of the biggest TAMP consolidations in recent memory, said Chip Roame, managing partner of Tiburon Strategic Advisors.
TAMPs offer fee-account technology platforms that financial advisers, broker-dealers, insurance companies and other firms can use to oversee their clients’ investment accounts. TAMPs allow financial professionals and firms to delegate asset management and research responsibilities to another party that specializes in those areas.
And they are growing, Roame said during a conference call last week. There are currently 69 TAMPs with $12.7 trillion in assets under management and administration, he explained, up from $7.1 trillion in 2016.
“The industry is very optimistic on TAMPs,” Roame said. “We could see this being a $15- or $16-trillion-dollar industry in a couple of years. So trillions of dollars of growth are coming in this industry.”
Tiburon’s highly exclusive CEO Summit attendees agreed in a September survey. Fifty-four percent of summit attendees predicted “substantial growth” of TAMPs, while the remaining 46% chose “moderate growth.” Just 23% predicted substantial growth during a February 2017 CEO survey.
In addition to significant growth opportunities, Roame made three additional predictions for TAMPs going forward:
- Growing dominance of platform TAMPs. Platform TAMPs are already dominant over product TAMPs, Roame pointed out. Of the $12.7 trillion of assets, $12.1 trillion are held in platform TAMPs.
Growth “will be faster for the platform TAMPs and more moderate for the product TAMPs, but both will have good growth rates,” Roame said. “The managed account trend is alive and well. Both of these are going to get lifted by that trend.”
- Emerging international opportunities. “There’s tons of international opportunities,” Roame said. “The managed account trend is alive and well around the globe today. So there’s plenty of opportunity here to push outside the U.S.”
- Private equity infusion and consolidation of TAMPs. The Orion deal was accompanied by news that Genstar Capital, a San Francisco-based private equity firm, will invest in the combined business, as will Orion’s existing financial partner, global growth private equity firm TA Associates.
This is something to watch in the TAMP world, Roame said. Private equity firms recognize the growth and moneymaking potential, he explained.
“I think there’s going to be a lot of private equity interest and a lot of consolidation of these smaller TAMPs,” he said.
InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at firstname.lastname@example.org. Follow him on Twitter @INNJohnH.
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