Dakota

Dakota is a 3rd party marketing firm that specializes in raising capital for active boutique investment management firms and their strategies. Founded in 2006, Dakota has raised ~$35 billion for 15 different investment management strategies and is located in Bryn Mawr, PA, with 10 employees.

Our View of the World: We live in a world that has undergone an enormous amount of change in the past ten years. Passive investing continues its assault on active management. The number of due diligence analysts (our buyers), has been dramatically reduced across all channels due to margin issues and the independent RIA channel continues its rapid growth, making it a more and more important channel but far less efficient to access because RIAs are a decentralized group.

These factors make the distribution of investment strategies more difficult because you have a competitor who is cheap, performs and is easy to understand (active strategies are opaque and generally hard to understand). You have a dwindling number of buyers and your targeted investors are more spread out than ever before, steadily hurting the efficiencies you once had in selling to a more aggregated group of buyers. However, if a firm wants to grow, they must find ways to distribute their products.

At Dakota, we specialize in growing active, boutique investment firms in the channels most appropriate for their product structures. Most of the firms we work with have mutual funds and separate accounts and the primary channels we sell to are RIAs, Multi-Family Offices, Banks, Broker Dealers and Institutional Consultants. With seven sales people in the field, we have been able to rapidly scale our clients funds and strategies.

We believe the trends mentioned above will continue, making raising capital for boutique firms ever more competitive. However, there are many creative ways to address these trends and make the process of accessing capital much easier.