How Our Portfolio Company Arch Simplifies Back-Office Operations for Private Investments

Aided by the advent of wealthtech solutions that democratize access to alternative investment classes such as private equity, private credit and private real estate funds, a growing number of investors are diversifying their portfolios away from traditional 60/40 stock/bond allocations via exposure to private markets. Per CAIS and Mercer, 92% of financial advisors currently incorporate alternative investments in client portfolios and 91% of them plan to increase allocations over the next two years.

As they do so, however, these investors and advisors are coming to realize that the liquidity and tax management requirements for alternative asset classes are far more complex than they are for traditional investments. Alternative investments are typically executed as multi-year commitments and pay out distributions periodically; therefore, investors must maintain an active liquidity management strategy in order to meet capital calls on short notice while optimizing returns on those liquid funds.

Tax management and reporting for alt investments is also quite fragmented: reports are issued by multiple managers either directly or via different investing platforms and often involve complex K-1 forms, which are typically supplied after the April 15 tax filing deadline. This requires investors to file for extensions and make accurate estimated tax payments in order to minimize interest and underpayment fees. (Stock/bond investments, by contrast, are more centralized: a single wealth manager can usually provide access to many investment opportunities and issue far simpler 1099 forms before the tax filing deadline.)

That's why we're so excited about our portfolio company Arch, a private investment management platform that aggregates, organizes and visualizes unstructured data for alternative investments. As “the digital admin for private investments," Arch helps a diverse range of financial professionals — from Registered Investment Advisors to banks, family offices, fund administrators and tax firms — understand and manage alternative investment portfolios across private credit, real estate, venture capital, hedge funds, private equity and other alternative asset classes.

Arch’s platform uses API integrations, AI and other automated methods to pull documents and data from hundreds of sources into its secure portal, creating a single source of truth for private investment allocators and their advisors. Arch then uses this data to support and automate a wide range of tasks, including:

• Tax filing: Arch retrieves, validates and stores tax documents like K-1s, making them immediately sharable with accounting teams.
• Capital calls: Arch identifies and tracks tasks such as capital calls, ensuring they are completed on time, and monitors them for fraud.
• Distributions: Arch displays all account inflows and outflows for ease of record-keeping and export to accounting and reporting systems.
• Investment updates: Arch organizes account statements and updates into a “single pane of glass” view for all of a user’s private investments and sends regular digests of key activities across their portfolio.
• AI-generated summaries and insights: Arch uses AI to provide concise summaries of investor materials and generate instant insights from unstructured data.

While Arch primarily embeds its platform within its B2B customers’ tech stacks, it also offers a web experience through which investors can access their updates and values directly.

Arch’s multiple endpoints with fund administrators and portfolio management tools allow the company to meet its growing list of customers where they are, fitting into their pre-existing tech stacks. Arch has also made itself indispensable and “sticky” by serving as its customers’ primary reference point for all private investment data, helping power holistic wealth planning and investing.

Arch’s robust, elegant platform was born out of co-founder and CEO Ryan Eisenman's personal experiences with laborious back-office operations for alternative investments during early stints in investment management. He's joined on the leadership team by co-founder and CTO Joel Stein, who was an engineering manager and key software developer at digital experience platform Yext, and co-founder and COO Jason Trigg, who was a quant trader at Tech Square Trading. Jason and Joel met at MIT, where they studied computer science and math.

Given its growing role in democratizing access to alternative investments, we were delighted to invest in Arch's Series A round (with Menlo Ventures, Craft Ventures, Quiet Capital, Carta and Focus Financial Partners also participating). We have loved working with Ryan, Joel, Jason and the entire Arch team since then, and look forward to supporting their journey for years to come.