NextCapital Group Raises $6 Million in Series A Funding

CHICAGO, Sept. 3, 2014 /PRNewswire/ -- Russell Investments and Transamerica Ventures Fund are leading a $6 million investment in NextCapital, a Chicago-based digital adviser that partners with financial institutions and media companies to help individuals build and manage world-class, personalized and affordable investment portfolios.  

NextCapital (formerly Business Logic) launched the industry's first defined contribution managed accounts platform in 2003. Today it's a leading provider of portfolio dashboards and wealth-forecasting software for 401(k) managed accounts. It serves more than 500,000 clients with over $70 billion in assets. Partners include Russell Investments, Transamerica, The Wall Street Journal, MarketWatch and Barron's.

"We're a digital adviser that works with large partners to deliver world-class advice and investment management — at the lowest cost on the market," NextCapital CEO John Patterson said. "This global market requires a different approach — combining a new kind of platform for investors with a select group of long-standing players."

In addition to Transamerica Ventures Fund and Russell Investments, other investors in the Series A funding include FinTech Collective, Kelvingrove Ventures and the Vermont Seed Capital Fund. Transamerica</org> and Russell use NextCapital to deliver their respective investment expertise to individuals through the co-branded NextCapital platform.

Personalized Target Date Funds Provide Cost-Effective Advice and Managed Accounts
NextCapital expects to drive innovation in the $700 billion market for target date funds (TDFs). TDFs automatically reset an investor's mix of stocks, bonds and cash, based on the individual's age only. Managed accounts provide more personalization than TDFs by considering factors in addition to age, including outside assets and savings rate. Managed accounts, however, typically come at a much higher cost than TDFs. NextCapital can help its financial partners provide the personalization of managed accounts at a lower price, making them more attractive to plan sponsors as the default option in defined contribution plans but with more personalization than a TDF.

"We have been working with NextCapital for more than a year to deliver our clients a more personalized asset allocation for their defined contribution participants – a solution we call Russell Adaptive Retirement Accounts," said Josh Cohen, managing director and head of Russell's institutional defined contribution business. "As we look ahead, we anticipate demand for these types of enhanced default investment solutions to grow. Our expanded relationship with NextCapital will allow us to continue to find technology-enhanced ways to deliver Russell's investment expertise to a larger number of individual investors in an efficient and cost-effective way."

Transamerica Ventures Fund is also excited about the prospects for a NextCapital partnership in the 401(k) market. "Billions of dollars are withdrawn from retirement accounts each year," said Georg Schwegler, CEO of Transamerica Ventures Fund.

"Increasingly, asset management firms such as Transamerica want to be in a strong position to manage the assets of customers who have accumulated retirement savings through products offered by their other lines of business. NextCapital's investor dashboard – coupled with its in-plan managed accounts – will enhance Transamerica's ability to roll customers' 401(k) plan assets into a reliable income stream throughout an increasingly longer retirement."

About NextCapital Group
Our mission is to help investors build and manage personal, objective and affordable world-class investment portfolios. NextCapital is a leading provider of 401(k) managed accounts services and investor portfolio management solutions. NextCapital works with media and financial partners including the Wall Street Journal Digital Network and Russell Investments. The company was co-founded by John Patterson, Dirk Quayle, Jon Hagen and Rob Foregger, and is comprised of a seasoned team of financial analysts and software engineers skilled in the deployment of large-scale secure financial applications. The NextCapital founders created the first 401(k) managed accounts platform, the first electronic financial adviser and one of the first online banks. NextCapital is headquartered in Chicago, IL with an office in Stowe, VT. For more information, visit www.NextCapital.com. 

About Russell Investments
Russell Investments (Russell) is a global asset manager and one of only a few firms that offers actively managed multi-asset portfolios and services that include advice, investments and implementation. Russell has more than $279 billion in assets under management (as of 6/30/2014) and works with over 2,500 institutional clients, independent distribution partners and individual investors globally. As a consultant to some of the largest pools of capital in the world, Russell has $2.4 trillion in assets under advisement (as of 6/30/2013). Approximately $5.2 trillion in assets are benchmarked (as of 12/31/2013) to the Russell Indexes, which have provided investors with 30 years of smarter beta. For more information, visit www.russell.com.

About Transamerica Ventures Fund
Transamerica Ventures provides seed, venture, and growth-stage funding to innovators in the financial technology or services, enterprise information technology, or Internet sectors which provide or develop solutions that can contribute to the growth and transformation of Transamerica and its affiliated companies. For more information, visit: www.transamerica.com/individual/what-we-do/about-us/ventures/.

About FinTech Collective
FinTech Collective is a NYC-based fund, investing in financial services technology companies. It was founded in 2012 to accelerate the re-imagination of financial services. FinTech Collective invests broadly across the financial services industry from wealth and asset management to banking, capital markets, payments and insurance. For more information, visit www.Fintech.io.

About Kelvingrove Ventures
Kelvingrove Ventures is a growth oriented private investment firm focused on innovative companies addressing large market opportunities. We help our portfolio investments reach their potential and create enduring value through our industry and investment expertise, in addition to providing access to capital.

About the Vermont Seed Capital Fund
The Vermont Seed Capital Fund is a $5M for-profit, permanently revolving, early-stage risk capital fund professionally managed by the VCET Capital Corporation, a subsidiary of the non-profit Vermont Center for Emerging Technologies (VCET). In 2013, VCET was ranked #11 globally and #5 in the U.S. by the UBI Index. For more information, visit www.vermonttechnologies.com.

SOURCE NextCapital Group