(Bloomberg) — Andreessen Horowitz, the venture firm that was an early investor in Twitter, Meta’s Facebook and Airbnb, is now looking to manage the fortunes of the startup founders it helps make rich.
The firm, nicknamed a16z, hired Michel Del Buono as chief investment officer for the new business that will provide a range of wealth-management services to a16z partners and the executives of its portfolio companies, according to people with knowledge of the plans. Del Buono most recently was the CIO at Jordan Park Group, which oversaw $17.6 billion on behalf of high-net-worth clients as of December.
A spokeswoman for Menlo Park, California-based a16z confirmed Del Buono’s hiring, but declined to comment further on the new venture.
Wealth management is often a massively profitable business and once money comes in the door, it’s generally slow to exit. Managers traditionally charge 1% of the assets they oversee, and profit margins can reach 50%, said Ben Phillips, head of asset management global advisory services at Broadridge Financial Solutions.
Growth can be meteoric. Iconiq Capital, the Silicon Valley wealth manager that started in 2011 and has managed the fortunes of Mark Zuckerberg, Jack Dorsey and Sheryl Sandberg, now oversees more than $80 billion, up from about $50 billion at the beginning of last year.
Del Buono led investments at Jordan Park starting in December 2017, and before that spent almost eight years at Makena Capital Management, where he headed portfolio investment strategy and direct investments, according to his LinkedIn profile. He received a PhD in management science and engineering in 1999 from Stanford University.
Co-founded by Marc Andreessen and Ben Horowitz, a16z has traditionally been very involved in promoting the companies it backs, from recruiting executives to holding mini-conferences to introducing firms to potential clients. It hopes to capitalize on the close relationships with founders to win the business of managing their fortunes, according to people with knowledge of the firm’s thinking, who asked not to be identified because the information is private.
The firm has exited more than 100 companies, according to its website, and a slew of them, including Pinterest Inc., Slack Technologies Inc., Instagram Inc. and Coinbase Global Inc., count their founders as billionaires.
A16z rival Sequoia Capital launched a money management product, Sequoia Heritage, in 2010 with $550 million from partners and outside capital. It now manages $16.4 billion and has extended its services to outside institutions including Oxford University, according to the endowment’s latest financial report. Sequoia, though, doesn’t provide a full slate of services, such as estate planning, to its wealthy clients.
–With assistance from Janet Lorin and Tom Maloney.
