Ritholtz Wealth Management has launched a venture capital fund that will invest directly in RIA technology companies.
In a Form ADV update it filed on Thursday, the $2.7bn RIA added language which indicates that its director of research, Michael Batnick (pictured, right), is the fund lead on ‘The Compound Capital Fund I LP.’
The fund is a private offering only available to Ritholtz Wealth Management clients and friends, Batnick said. He declined to specifically comment on the fund’s launch date or how much money it had raised.
‘Over the years, we have worked closely with a lot of companies in the fintech space and in some cases, we’ve had a very big impact on their outcome, whether it’s with our distribution or being users,’ Batnick said. ‘We thought that it made a lot of sense to really lean into this and leverage the network and social capital we’ve built up over the years.’
The fund’s branding ties into ‘The Compound & Friends’ a popular weekly podcast Batnick co-hosts alongside Ritholtz chief executive Josh Brown (pictured, center).
Notable recent guests on the podcast have included political scientist Ian Bremmer, comedian Tim Dillon and Boston Private CIO Shannon Saccocia.
Batnick said the Compound brand is ‘one of the main reasons so many wealth tech entrepreneurs are interested in talking with us.’
Batnick declined to identify any companies that The Compound Capital Fund I has invested in and declined to comment when asked if the fund would take control stakes in companies or invest as part of a broader consortium.
AngelList, a website which helps startups raise money, will serve as the fund’s administrator.
Ritholtz Wealth Management indicated in its Form ADV filing that Batnick and the RIA would split a portion of the fund’s management fee and a percentage of carried interest of the fund’s net profits.
‘In addition, our firm’s representatives invest in the fund and may participate in follow-on offering(s) of the fund,’ Ritholtz Wealth Management said in the filing. ‘Our firm therefore has an incentive to recommend that clients invest in the fund in order to increase the amount of compensation that we earn. To mitigate this conflict of interest, our firm will act in the client’s best interest in accordance with our fiduciary duty.’
Headquartered in New York City, Ritholtz is primarily owned by chairman Barry Ritholtz, Brown, director of wealth management Kris Venne and Batnick.
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