Will Venturi repeat the success of Chicago-based RIA Cresset Capital Management?

Venturi Wealth Management, a registered investment advisory (RIA) based out of Austin, Texas, will soon launch a $100 million private equity fund.

Venturi will offer the fund to its 200-odd clients which make up its $1.2 billion asset base under management. These clients are mostly entrepreneurs and business executives actively seeking opportunities in the private equity space.

The fund will charge a management fee to cover the operating costs of the fund. It will only make money if the client’s investment makes a return.

Size is important, but not necessarily an advantage

Turns out the largest private equity (PE) deals are not necessarily so profitable given the hot competition to secure those deals.

Venturi co-founder and CEO Russ Norwood is instead looking at deal sizes in the range of $5 million to $10 million in mid-sized companies in Texas and the Southwest having revenues from $15 million to $100 million.

Norwood dubs it the “farm-to-table” approach to PE, given that it is focused on local or regional companies. “When you go into the small- or mid-market, the returns are better, and correlations are less,” he says.

New trend of RIA’s floating a PE fund

In July 1997, RIAs Eric Becker and Avy Stein co-founded Cresset Capital Management and offered exclusive access to real estate, private equity and secondaries deals.

Cresset was able to mop up over $3 billion in the first year of its operations.

In that view, Venturi’s PE fund may also attract sizable subscriptions.