Private equity, credit, and real estate managers increasingly look beyond institutional LPs toward the wealth management channel. RIAs collectively manage trillions in assets, and allocator appetite for private markets continues to grow. Accessing this capital, however, introduces operational considerations that differ meaningfully from traditional institutional fundraising.
What Structures Enable Wealth Channel Access?
Most private fund managers cannot accept direct subscriptions from individual RIA clients due to minimum commitment thresholds and administrative complexity. Instead, capital typically flows through intermediary structures.
Feeder funds aggregate commitments from multiple wealth channel investors into a single LP interest in the main fund. The feeder handles capital calls, distributions, and K-1 issuance for underlying investors while appearing as one line item on the main fund's cap table. This simplifies fund administration at the main fund level while creating a parallel administrative workload for the feeder.
Alternative structures include:
Interval funds and tender offer funds: Registered funds offering periodic liquidity (quarterly or semi-annually) while investing in private assets
Evergreen structures: Perpetual vehicles with rolling NAV subscriptions and redemption windows
Platform feeders: Vehicles sponsored by distribution platforms like iCapital or CAIS that aggregate capital across multiple RIA relationships
Each structure carries different registration, liquidity, and reporting requirements that shape operational workflows.
How Do Reporting Requirements Differ?
Institutional LPs typically receive quarterly capital account statements, annual audited financials, and K-1s on established timelines. Wealth channel investors and the RIAs serving them often expect more frequent communication and different formatting.
Common wealth channel reporting expectations include:
Monthly or quarterly performance summaries formatted for client-facing presentation
Simplified capital account statements with clear contribution and distribution histories
Consolidated reporting feeds compatible with RIA portfolio management systems
Digital delivery through portals or API integrations with aggregation platforms
Fund administrators supporting wealth channel distribution often maintain parallel reporting tracks: institutional-format deliverables for direct LPs and reformatted outputs for feeder investors or platform integrations.
What Compliance Documentation Do RIAs Require?
RIAs conducting due diligence on private fund offerings typically request documentation beyond what institutional allocators require. As fiduciaries to their clients, RIAs must demonstrate that recommended investments align with client suitability requirements.
Standard RIA due diligence packages often include:
Fund offering documents (PPM, LPA, subscription agreements)
Form ADV Parts 1 and 2A for the fund manager
Audited financial statements for prior funds
Track record and performance attribution data
Fee disclosure schedules with all expense allocations
Conflict of interest disclosures
Background checks and regulatory history for key personnel
Cybersecurity policies
Fund operations teams supporting wealth distribution maintain these materials in accessible formats, often through digital data rooms with version control and access logging.
How Does Custodial Coordination Work?
Wealth channel investors typically custody assets through RIA-selected custodians such as Schwab, Fidelity, Pershing, or similar platforms. This creates coordination requirements that differ from institutional fund administration.
When an RIA client subscribes to a feeder fund, the custodian must:
Accept and hold the fund interest as an asset on the client's statement
Process capital calls by releasing cash from the custody account
Receive and credit distributions
Reflect updated valuations for performance reporting
Some alternative investment platforms provide custodial integration that streamlines these workflows. For funds distributed outside established platforms, operations teams may coordinate directly with multiple custodians, each with different procedures for alternative asset holdings.
What Tax Considerations Arise?
Wealth channel investors include IRAs, Roth IRAs, and other tax-advantaged accounts alongside taxable accounts. Private fund investments held in retirement accounts can generate unrelated business taxable income (UBTI), triggering filing obligations and tax liability within the IRA itself.
UBTI commonly arises when:
The fund uses leverage (debt-financed income)
The fund invests in operating businesses structured as partnerships
The fund generates trade or business income passed through to LPs
Fund managers targeting wealth channel distribution often address UBTI concerns through blocker corporations or by designing fund structures that minimize debt-financed income. Operations teams must ensure K-1s properly report UBTI information in Box 20, Code V, enabling custodians to fulfill Form 990-T filing obligations for affected accounts.
Building for the wealth channel requires operational infrastructure that differs from institutional-only distribution. The reporting cadence, compliance documentation, custodial coordination, and tax considerations each introduce workflows that fund administrators and operations teams must accommodate. Managers successfully accessing RIA capital typically invest in these capabilities before launching wealth-focused products.