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As the desire for private markets exposure becomes commonplace among individual investors, one RIA is getting into the asset management side of the equation by launching its own funds.
This week, Granite Harbor Capital, a division of Granite Harbor Advisors, a Houston-based RIA with $600 million in AUM, launched Mariner Fund I, a closed-end fund that will focus on private equity operating companies and commercial real estate.
In October, Granite Harbor Advisors announced the creation of Granite Harbor Capital, a private markets vertical designed to expand the firm’s diversified private investments.
According to Brian W. Sak, managing partner at Granite Harbor, the move was spurred by a combination of clients’ consistent requests for greater exposure to private markets and the firm’s dissatisfaction with the often high costs and limited platforms for accessing such investments through third parties.
“Finally, after more than 25 years of building relationships in the business … we reached a point where our proprietary, off-market deal flow justified a dedicated opportunity fund,” Sak said.
Mariner Fund I, Granite Harbor Capital’s inaugural project, will focus on investments located primarily in the Midwest, including multifamily and industrial real estate and private equity operating companies in the manufacturing, infrastructure support and logistics sectors. The fund is open to both Granite Harbor Advisor clients and outside investors who meet the qualified client threshold, with a minimum investment requirement of $250,000. It targets returns in the mid-teen IRR range within a three- to five-year time frame, according to Derek J. Taylor, managing partner at Granite Harbor Capital. The total life of Mariner Fund I will be 10 years.
Taylor said the fund should benefit from Granite Harbor’s longstanding relationships in the targeted industries in the Midwest, allowing the firm to provide clients with direct, co-GP or co-investment opportunities.
In addition, “Existing clients of Granite Harbor Advisors enjoy the benefit of having their private market allocations folded into their public market or other wealth management strategies,” said Nicholas M. Brown, managing partner at the firm. “We feel that is a significant value add for our clients as they get a single source for due diligence, capital call and cash flow management, and reporting.”
The firm’s executives said they received almost $3 million in commitments within the first day of the fund’s launch, and expect to reach their $50 million target relatively quickly. Granite Harbor Capital has been marketing Mariner Fund I through direct outreach, targeted digital communications, a series of educational webinars and small in-person events in markets including Houston and Milwaukee, where the firm operates.
“At this time, we are not broadly distributing the fund through third-party investment platforms, as the initial focus remains on thoughtful, aligned capital rather than wide-scale distribution from the onset,” said Sak.
Atrivus Legal advised Granite Harbor on fund formation, while Baker Tilly and Weaver are providing fund accounting and fund formation services, respectively.
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