Opto Investments

Duty of care. Duty of loyalty. And soon: duty to use AI? Joe Lonsdale and Matthew Malone, of Opto Investments just published a quietly provocative argument about fiduciary standards in private markets: 𝗧𝗵𝗲 𝘀𝗲𝘁𝘂𝗽: Financial advisors are tasked with maintaining 'Fiduciary Duty of Care': which requires meeting the standard of a "reasonably prudent person" under similar circumstances. The question of prudence is judged against prevailing norms - meaning it evolves with the market (and with technology). 𝗪𝗵𝗲𝗿𝗲 𝗶𝘁 𝗴𝗲𝘁𝘀 𝗶𝗻𝘁𝗲𝗿𝗲𝘀𝘁𝗶𝗻𝗴: In public markets, a fiduciary can reasonably survey the landscape. Structured filings. Centralized data. Standardized formats. Private markets? No single comprehensive data source. Inconsistent formats. Wide return dispersion. Data that's "unreliable until validated." This sets up what Lonsdale and Malone call an emerging (and fundamental) dilemma: 𝘏𝘰𝘸 𝘤𝘢𝘯 𝘧𝘪𝘥𝘶𝘤𝘪𝘢𝘳𝘪𝘦𝘴 𝘣𝘦 𝘴𝘶𝘳𝘦 𝘵𝘩𝘦𝘺 𝘩𝘢𝘷𝘦 𝘴𝘦𝘦𝘯 𝘦𝘯𝘰𝘶𝘨𝘩 𝘰𝘧 𝘵𝘩𝘦 𝘶𝘯𝘪𝘷𝘦𝘳𝘴𝘦 𝘵𝘰 𝘪𝘥𝘦𝘯𝘵𝘪𝘧𝘺 𝘵𝘩𝘦 𝘣𝘦𝘴𝘵 𝘰𝘱𝘵𝘪𝘰𝘯𝘴? Historically, investors relied on incomplete databases, consultants, networks, and as many analysts as budget allowed. Then they stopped looking when time ran out... even if the universe hadn't been fully explored. And that was perfectly reasonable. 𝗪𝗵𝘆 𝗔𝗜 𝗰𝗵𝗮𝗻𝗴𝗲𝘀 𝘁𝗵𝗲 𝗰𝗮𝗹𝗰𝘂𝗹𝘂𝘀: AI doesn't just make diligence faster. It expands what's possible to see. And once it's possible to see more - at an effective price point - the "reasonably prudent person" standard shifts upward. This changes the imperative to use AI from efficiency to - potentially - compliance. AI raises the floor on what fiduciary duty requires - because it raises the ceiling on what's achievable. At the moment this sounds somewhat distant, but things change fast. So does competition. The point is: within a just a few years... if your advisory practice isn't AI you'll be in trouble, for more reasons than one. Thought-provoking! A link to the original piece is in the comments. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Follow me and The Private Markets Forum for posts on the people + firms shaping next-gen private markets.

Innovation has transformed the world of goods - think about how a wall-sized TV now costs what a tiny cathode-ray set did decades ago. But services? They’ve largely been left behind. That’s finally changing. Learn more about this shift and other exciting innovations - watch the replay of our recent webinar featuring our co-founders Jacob M. and Joe Lonsdale, as well as Addepar’s Janeen A. France: https://hubs.la/Q03VRmRT0

Strong networks. Stronger outcomes. Our data suggests VC managers with higher centrality - deeper, broader, more active relationships - have higher follow-on funding rates over time. That’s not luck. It’s the network effect in action.

AI is reshaping private markets due diligence and research. Private markets run on unstructured, uneven data: AI can help structure it. At Opto, we apply AI to tools that help quickly screen deals, verify data in real time, and automate the busywork so analysts can focus on applying their judgment and insight. Used correctly, AI doesn’t replace rigor, it strengthens it. Read more in this article co-authored by Joe Lonsdale and Matthew Malone, CFA: https://hubs.la/Q03VnWgJ0 Want to learn more about how we can support your private markets program? Schedule a demo: https://hubs.la/Q03VnVM_0 #privatemarkets #wealthmanagement #artificialintelligence

“The vast majority of family offices, 85, 90% of them, they're in over their heads. And many of them either shouldn't exist and could be part of a multi-family office or need better technology in order to exist.” Watch Ronald Diamond, founder and CEO of Diamond Wealth, and our co-founder Jacob M. discuss the evolution of family offices, and how they are institutionalizing their investment processes and taking advantage of technology, their unique networks, and experience to build the “better model” asset manager: https://hubs.la/Q03VdvM20 #familyoffices #wealthmanagement #privatemarkets

You’re not choosing between “good” and “great” hires. That’s like choosing between a Little League team and a World Series lineup and then pretending they’re playing the same game. Our co-founders Joe Lonsdale and Jacob M., joined Janeen A. France of Addepar for a lively conversation about the importance of never settling for less than top talent. Listen to the full conversation: https://hubs.ly/Q03TFk5G0 #privatemarkets

Speaking at Future Proof Festival, Opto’s Nick Gerace highlighted our partnership-first approach to The Wealth Advisor: “And it's really important to start from a framework - almost a goals-based framework - from an investment perspective of what are we trying to accomplish?” Private markets strategies should start with goals, not products. We don’t have product menus because we do not take compensation from fund managers to offer funds, which enables an undiluted focus on quality when we work with our partners. Sound interesting? Let’s talk: https://hubs.la/Q03TNprv0 #privatemarkets #wealthmanagement

Jacob M. from Opto Investments weighs in on Schwab's acquisition of Forge Global. Platforms are moving quickly into private markets, but it’s worth pausing to consider what it really means for fiduciaries and their clients. https://hubs.la/Q03TzHtn0 #privatemarkets #wealthmanagement

You can play the “Who do you know?” game all day long, but how do you know who really has the relationships and the network that will give them the unique insight they need in the quest for alpha? Our co-founder Jacob M. and Superclusters podcast host David Zhou explore how you can tell the pretender from the real deal. Spend some time in the marketplace of ideas with them as they talk about underwriting relationships, and much more: YouTube: https://hubs.la/Q03Tj_4B0 Spotify: https://hubs.la/Q03Tj_Sf0 Apple Podcasts: https://hubs.la/Q03Tk0vf0 #privatemarkets #wealthmanagement