May 06, 2020. A company that helps third-party marketers connect with investors and network among themselves is growing rapidly. In the first quarter, New York-based Stonehaven added five small marketing shops that raise capital for alternative managers. It expects to add 5-12 more affiliates in the second quarter despite the upheaval wrought by the coronavirus pandemic. By the end of 2021, Stonehaven anticipates doubling the aggregate number of marketing contractors in its network, to about 100. The company also works extensively with investment bankers offering co-investment opportunities. While its affiliates are independent, Stonehaven takes cuts of their revenues in exchange for access to its online platform, known as Nexus, along with other services including licensing and document management. One of Stonehaven’s pitches is that Nexus allows its affiliates to cross-market with one another at a time when fund-raising has slowed for many hedge funds whose strategies are out of favor. Stonehaven boasts of at least 60 such cross-marketing relationships.
- “It’s difficult for marketers to source new mandates now because everything is moving so fast and you can’t meet people in person,” founder David Frank said. “As a result, mandates are primarily being sourced through pre-existing relationships.”
Frank, a former investment banker, founded Stonehaven in 2001 as a capital-raising firm. It later evolved into a platform for marketing firms. Nexus includes a database of about 20,000 institutional investors and wealthy individuals, along with some 100,000 points of contact for those investors. The database is designed for “crowdsourcing,” allowing affiliates to collaborate on investor data.
- “A lot of what we’re doing is building a community,” Frank said. “It’s not just technology.”
Among the affiliates who raise capital for hedge funds: 360 One Firm and Adara Capital, both based in New York; Black Pearl Advisors of Tampa; and Blue Water Strategy of Old Greenwich, Conn.
About Stonehaven, LLC
Stonehaven is a private capital markets FinTech operating system (technology + infrastructure + data) and collaboration network (origination + distribution) for investment bankers and placement agents (Affiliate Partners) to support companies and investors. Our next generation operating system supports the entire lifecycle of deals: sourcing, contracting, due diligence, identifying target investors/buyers, managing execution (robust CRM architecture), collaborating with other dealmakers, reporting and closing transactions. Our Affiliate Partners are active across all sectors of private capital markets: raising capital, executing M&A transactions and conducting secondaries.
