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RIA Launch: Outrunner Capital forms Family Office in Austin, TX
Fusion congratulates Jonathan Levy, Erik Cohen and Branko Martinez on launch of Outrunner Capital!
Newly formed family office Outrunner Capital, based in Austin, Texas, has signed a deal to join Goldman Sachs’ RIA custody platform, Goldman Sachs Advisor Solutions (GSAS).
In its brochure, Outrunner recommends GSAS, Charles Schwab’s Schwab Advisor Services division and Fidelity’s National Financial Services and Fidelity Brokerage Services as custodians.
But Goldman is the only custodian that Outrunner discloses is offering ‘transition payments’ to vendors who provide services associated with transferring clients to GSAS. The payments, which can include ‘transfer exit fees’ paid to Outrunner’s clients, is contingent upon clients transitioning at least $300m to GSAS, Outrunner’s brochure states. The brochure notes that the payment program creates a conflict of interest for Outrunner ‘to recommend Goldman Sachs until the threshold is met.’
A spokesperson for Goldman Sachs did not respond to questions about the transition payment offering by press time.
Outrunner filed for registration as an investment adviser in April 2024 and is owned by Erik G. Cohen and Jonathan L. Levy, according to filings with the Securities and Exchange Commission (SEC).
Cohen and Levy both previously worked at Brown Advisory, formerly the investment management division of Baltimore-based investment bank Alex. Brown & Sons. The firm, which went fully independent through an employee-led buyout in 1998, reported managing more than $108bn in client assets as of a May 17 Form ADV. Levy and Cohen both joined Brown Advisory in July of 2016, according to LinkedIn.
Branko Martinez Pejnovich will join Outrunner as chief compliance officer from Durbin Bennet, where he spent more than six years, according to LinkedIn.
A spokesperson for Outrunner Capital declined to comment.
According to its brochure, Outrunner offers wealth management services including a ‘broad range of financial planning and consulting services as well as discretionary and/or non-discretionary management of investment portfolios.’ The firm does not currently list any assets under management.
Outrunner has a minimum portfolio value of $25m and charges a minimum annual fee of $150,000, with exceptions, according to its brochure.
Goldman Sachs has had a winding road since its entry into the RIA custody business via its 2020 acquisition of online brokerage firm and custodian Folio Financial. The company sporadically revealed custodial agreements in the first years following the Folio deal, but last year struck partnerships with Creative Planning, Prime Capital Investment Advisors, NewEdge Wealth and Ashton Thomas Private Wealth.
Even so, GSAS has yet to make a larger dent in the RIA custody marketplace. According to an April survey from fintech consultancy T3 and newsletter publisher Inside Information, GSAS has well under 1% market share and a user rating of just 6.86 out of 10.
‘We’re watching the Goldman Sachs journey with its purchase of Folio Institutional which, despite the tech innovations in the prior incarnation (folios as portfolio building blocks and fractional share trading), had never achieved high ratings or significant market share,’ the survey stated. ‘The raw market share numbers are still not high under Goldman, but growth is in the 40% range, and the user rating has improved. The coming year will tell us more about whether this will become a significant competitor in the custodial market.’
While GSAS’s recent deals with independent mega-RIAs have garnered headlines, Outrunner hews closer to the other type of custodial client that Goldman is targeting: the breakaway RIA. In May of 2023, GSAS co-head of custody sales Jeremy Eisenstein told Citywire that the company planned to build its digital solution to facilitate more wirehouse transitions.
Last year, GSAS revealed the addition of United Advisor Group, which was founded by a consortium of advisors breaking away from various independent broker-dealers and RIAs, to its platform. The firm expected to count roughly $750m in client assets after its first 12 months of operations.
And in 2022, GSAS made its first big breakaway deal with the addition of Beverly Hills Private Wealth, founded by a group of Merrill Lynch defectors who collectively oversaw more than $1bn at the wirehouse.
In a statement, Eisenstein expressed excitement at Outrunner’s deal to join the GSAS platform.
‘Through our digital-forward platform, GSAS offers innovative solutions that will help meet their clients’ financial needs,’ Eisenstein stated. ‘We are grateful for the opportunity to join Outrunner Capital on their path to independence.’
Editor’s note: This story was updated after publication to include a quote about GSAS from the most recent T3/Inside Information Advisor Software survey.
