(“Ethic”), the tech-driven asset management platform that powers personalization for advisors, today announced that it has closed $29 million in Series B funding. The round was led by Oak HC/FT, with participation from existing investors including Fidelity Investments, Nyca Partners, Sound Ventures, ThirdStream Partners, Urban Innovation Fund and Kapor Capital.
This new capital will support Ethic’s continued rapid growth, in addition to further investment in the company’s technology platform. The funding follows a strong period of growth for Ethic, which saw the company increase the number of assets on its platform by over 10x since its prior round of funding in 2019. This also comes at a time when global events have boosted investors’ consideration for how their portfolios affect sustainability issues such as racial justice, climate change, worker treatment, democracy, and health and wellness.
“We’re grateful to have backers who share our belief that we all have a role to play in fostering a more sustainable and equitable future, and that the capital markets can be leveraged as a force for good,” said Doug Scott, co-founder and CEO of Ethic. “This is particularly true when considering the developments of the last year, which only reaffirm our mission of helping accelerate the transition to sustainable investing.”
Ethic’s Series B raise also comes on the heels of a year in which direct indexing, which is core to its offering, has continued to gain significant momentum in the asset and wealth management community. Following a wave of recent industry consolidation, the company has emerged as one of the largest independent providers of sustainable direct indexing strategies for wealth advisors, with more than $760 million in assets.
“It’s increasingly clear that the future of asset management is personalized, and Ethic is leading the charge,” said Oak HC/FT partner and former global head of investment management technology at Goldman Sachs, Dan Petrozzo. “Ethic’s unique direct indexing approach ensures the company is primed to meet a burgeoning demand from wealth advisors, as well as the broader investor community. We’re delighted to be partnered with this mission-driven team that is helping drive a major revolution in asset and wealth management.”
Founded in 2015, Ethic empowers advisors to personalize a given benchmark to correspond with a client’s investment, values, and tax management preferences, while seeking to minimize tracking error to the underlying benchmark. Advisors can also differentiate themselves and forge deeper relationships with their clients using Ethic’s technology platform to deliver transparent impact reporting, and leveraging its breadth of educational tools surrounding various sustainability issues.
Since announcing its $13 million Series A raise in 2019, Ethic has entered into a strategic agreement with Fidelity Investments and has partnered with several of the largest advisory firms in the country. This past year, the company has been the recipient of a number of industry accolades, including InvestmentNews’ Excellence in Diversity & Inclusion Awards, while its co-founders have been named among Business Insider’s Rising Stars of Wall Street.
Ethic is a tech-driven asset management platform that powers personalization for advisors. The company enables advisors to personalize a given benchmark to correspond with a client’s investment, values, and tax management preferences, while seeking to minimize tracking error to the underlying benchmark. The Ethic offering is available to advisors custodying with Fidelity, Charles Schwab / TD Ameritrade, or Pershing. The company is backed by investors including Oak HC/FT, Nyca Partners, Fidelity Investments, and ThirdStream Partners. Ethic is an SEC Registered Investment Adviser based in New York City. Learn more at ethicinvesting.com.
Founded in 2014, Oak HC/FT is the premier venture growth-equity fund investing in Healthcare Information & Services ("HC") and Financial Services Technology ("FT"). With $3.3 billion in assets under management, we are focused on driving transformation in these industries by providing entrepreneurs and companies with strategic counsel, board-level participation, business plan execution and access to our extensive network of industry leaders. Oak HC/FT is headquartered in Greenwich, CT, with offices in Boston and San Francisco. Follow Oak HC/FT on Twitter, LinkedIn, and Medium.