Real Talk with George Lucaci, Mercury Capital Advisors
Today we sit down with George Lucaci of Mercury Capital Advisers.
George Lucaci is a member of the Mercury iFunds Distribution team.
Before this, he was the head of Capital Alternatives Group, an independent hedge fund capital raising enterprise. He was also Senior Managing Director of HedgeFund.net, one of Wall Street’s first electronic alternative asset distribution platforms and spearheaded its capital raising business and broker-dealer. Previously he served variously as head of Proprietary FX Futures Arbitrage Trading at Citibank, was National Product and Sales Manager for Nomura Securities and Head of U.S. Fixed Income, and also served as Managing Director of Merrill Lynch’s Mortgage–Backed Securities business.
Our focus today is on the Mercury iFunds digital platform, which provides wealth intermediaries exclusive access to leading-edge alternative investments. Also, as part of the firm’s mission to educate advisors and investors, the platform delivers third-party research and videos.
It is part of a growing trend of companies investing in resources provided to members to further expand their knowledge base about alternative investments. The concept of ROE (return on education) helps investors and advisors better understand the benefits of alternative investments, key differentiators between asset classes, portfolio differentiation strategies and today’s current market environment.
FIN: How fast is this digital transformation taking hold in the industry, and what are the pros and cons?
George Lucaci (GL): By accelerating the extinction of outdated information the digital revolution is constantly transforming our world. Automation, artificial intelligence, and robotics have become part of our daily lives.
Companies that understand this are now called “exponential organizations,” and will invariably create a larger footprint in their industry. Supporting innovation has a lasting effect on productivity, but keeping the client’s needs in mind during this evolution must be part of the process.
What considerations do institutions, wealth advisors and other intermediaries need to be aware of when adopting digital?
GL: Efficiency, education, ease of use along with a secure infrastructure are key consideration needed to promote confidence. Digital should be a route to strengthen and expand your business. This means working with an experienced partner, who has a deep knowledge base and a history of offering curated alternative investment opportunities.
What are the benefits of shifting to digital?
GL: Focusing on client service is crucial for growing any business. This means reducing administrative burdens through state-of-the-art technology. Embracing digitalization saves time for value-added and customer-centric pursuits such as working with clients and investment research.
Reducing administrative burdens provides the most valuable of resources to an advisor, time to focus on growing their business, rather than completing paperwork. Digital Darwinism means “disrupt or be disrupted.” Our digital platform includes 19 different alternatives investment categories, enabling investors to look across multiple asset classes, choose from leading managers in each category and perform due diligence to build confidence in the specific choice.
While multiple managers are available on the site, they are all subject to the same firm-wide diligence to ensure that investors know they are selecting from world class managers gathered together with sophisticated investors.
You’ve re-coined ROI to ROE – what does this mean and why?
GL: “Return on Education” is our mantra, yet the challenges are daunting.
The need for lifetime learning and a willingness to constantly change and reevaluate goals must be established by those organizations hoping to remain relevant – and profitable. An organization must embrace digital Darwinism, or become the victim of it. We believe that providing more third-party information to advisors ultimately contributes to better investment decisions and results.
With the above in mind, where do you see the placement agent model in 10 years?
GL: We believe that investors working with trusted counterparties that understand their investment goals – given the range of available opportunities – will be increasingly important. Placement agents who truly partner with and understand the manager’s mission – as well as their investors’ objectives – will be standing strong in 10 years.
Many aspects of investment research/asset allocation are already affected by digital technology. This includes broad screening to focus on high-quality managers, as well as the diligence effort to know a specific fund. Placement agents identify leading managers, and then investors choose the best fund for their unique investment need. Digital tools will enable investors to make solid choices among leading providers.
About Mercury iFunds™
The Mercury iFunds platform, delivers leading-edge alternatives managers to the Private Wealth community through a comprehensive, highly efficient, and low-cost, digital platform. Being an elite global firm our principals have raised over $160B across various alternatives asset classes/managers in both the institutional and Private Wealth investor channels.
The Mercury iFunds™ digital platform provides access to world-class managers that typically are available only to large institutional investors [$25MM+ LPs]. The platform offers a menu of asset classes, leading to a curated list of distinguished managers. The next step drills down to a series of virtual data rooms, so investors conduct institutional due diligence and then review/execute subscription documents in a far more time-efficient process than is generally the case.