Managing $525 Billion by Rethinking Wealth Management | Kurt MacAlpine, Corient

David Senra (0:02)

How do you describe what you do?

Kurt MacAlpine (0:05)

So I'm a partner in the CEO of Corient, which is the largest multifamily office in the world, and the largest non-bank wealth manager serving Ultra-Hinerworth clients. So today, we're managing about $525 billion of assets on behalf of clients across 15 jurisdictions globally.

David Senra (0:21)

We hung out in Miami a few weeks ago, and at the end of that meeting, I was like, damn it, I wish we would have just recorded this. It would have been one of the best episodes I would be capable of creating. Because it's not only that you're the largest in the world, you have $525 billion of assets in management for client assets, right? But it's the fact that you came from almost the outside and re-engineered the incentive structure of an existing industry, and the way you thought about doing this is fascinating. I would step back too, it's like at 39 years old, I don't think you'd ever been a CEO at that point.

Correct. Can we start the story from you're 39, you're getting recruited to be the CEO of this Canadian company and then bring us up to where you are today?

Kurt MacAlpine (1:03)

Sure.

CI was a publicly traded Canadian Asset Manager, trading on the Toronto Stock Exchange had been public for about 25 years at that point in time. The primary business was Canadian Asset Management, and essentially economically, and there was a small wealth management business in Canada or small relative to the size of the Asset Manager. But economically, the entire profitability of the firm was derived effectively from the Canadian Mutual Fund business.

David Senra (1:29)

And they were making how much at the time?

Kurt MacAlpine (1:31)

Several hundred million dollars a year every year.

David Senra (1:32)

Okay. And so why do they need a new CEO?

Kurt MacAlpine (1:35)

The Mutual Fund industry, like all industries, kind of go through ebbs and flows. And I think that the go forward growth prospects for Mutual Funds as a structure in particular, rise of ETFs, increasing importance of alternatives, just the expected growth or the growth, kind of the trends around growth that we were seeing in Mutual Funds started to taper off relative to other areas. So the company was looking for a new strategic direction for the business at that point in time, decided to do an executive search. I was fortunate enough to be the candidate they had selected as part of that search process.

David Senra (2:10)

Were you coming with a rather like aggressive plan? Like where did that aggressive plan come from?

Kurt MacAlpine (2:14)

A couple of different things. One, I had an opportunity to spend my entire career in the industry through a couple of different lenses. So I spent 10 years in an advisory capacity, working as a management consultant, spent about four and a half years, post that four to four and a half years as an operator inside of an asset management business. And through that, you kind of build points of view and perspectives, you see things that work really well, you see things that you think are ripe for improvement.

And in the case of this particular business, I saw tremendous benefits towards globalizing and diversifying the company. And I had a very strong point of view that I wanted to do that by launching an Ultra High Net Worth Wealth Management business first in the US, hopefully generating enough success to be able to globalize that business.

David Senra (3:02)

Why was that the most interesting idea to you?

Kurt MacAlpine (3:04)

It was interesting for a few different reasons. So I think that there were really kind of three things that stood out to me. The first one was in wealth management, Ultra High Net Worth Wealth Management in particular.

Industries have headwinds or tailwinds. Obviously, I believe wealth management has a tremendous amount of tailwinds. There's more wealth being created today than ever. That wealth is more concentrated than ever. There's more complexity tied to that wealth than ever. It's transitioning generations faster than ever, and it's more global than ever. All of those things support the underlying need for advice. So that was the first piece.

Second piece was, I felt like it was an industry that was ripe for disruption along a couple of different dimensions. So the first one is around the industry structure. So think of it as our industry as a giant barbell. So on one end of that barbell, you have large banks that theoretically can do everything for clients or certainly have the resources to do so. But whether it's governance, bureaucracy, internal conflicts, in my opinion, they give back a lot of the scale benefits that clients should ultimately be benefiting from.