Every other investment model relies on you or your clients to spend time, money, and effort on "off-the-shelf" products that aren't optimized for either. If your investment solutions don't separate you from your competition AND waste precious resources — are they really solutions? Varium was designed from the beginning to optimize both your operational excellence AND firm value.
Running institutional-quality investment management — either inside your firm or through a third party — carries substantial ongoing cost. And in an industry where firms are valued as multiples of EBITDA, every dollar of that cost is suppressing your enterprise value by a multiple of itself.
RIA firms trade at meaningful multiples of EBITDA. Every dollar that doesn't drive client acquisition, retention, or service is a dollar that compounds against what your firm is ultimately worth — many times over.
Eliminate the overhead, and the savings don't just improve margin — they compound, through the same multiple, into firm value.
Varium absorbs the internal investment function — the cost comes off your P&L. The savings flow directly to your bottom line — and through the EBITDA multiple, directly into the value of your firm.
Substantial annual savings — every year, in perpetuity.
Capitalized at any reasonable RIA EBITDA multiple, those savings translate into a meaningful, immediate increase in firm value — without raising fees, adding clients, or working longer days.
And this is only the first source of value. The second — equity in Varium itself — has two additional streams of value creation.
Internal investment teams keep the cost on your P&L year after year. Varium absorbs the function. The cost comes off your books, the savings stay with you — and through the multiple, into firm value.
Clients pay two fees — advisory fees and investment management fees (TAMPs, OCIO, mutual funds, ETFs, SMAs). The advisory fee is captured and monetized into the value of the RIA firm. The investment management fee, however, is "lost" to the third-party manager, who retains all the economic value for themselves. These values are roughly equal — advisors "give away" half of the value clients pay.
Varium's model captures this "lost value" and capitalizes it into the equity of the partnership. Partnering with Varium therefore increases your firm value two ways: reduced investment-related expenses (see prior section) and through equity partnership. This potent combination has the ability to DOUBLE THE VALUE OF YOUR FIRM without adding a dollar of AUM.
"Owning equity in Varium means capturing not only the value you create, but also the value that all of the other partners create — a true network multiplier. As the network grows, so does the value of your equity."
Full partnership economics — including how equity participation is structured and develops over time — are reviewed with qualifying advisor firms during partnership discussions.
The Varium model has three independent levers of value creation: reduced investment expenses (Part One), a pro rata cashflow distribution from the partnership (Stream 1), and direct equity ownership in Varium (Stream 2). Most advisors will keep some of their existing investment infrastructure — some people, systems, accounting, day-to-day operations — and that's appropriate. The worked example below isolates the partnership effect: it assumes no expense reduction. Even on that conservative basis, the two partnership streams alone have the potential to double the value of your firm. Any cost savings from Part One layer on top.
Original firm value: $18.75MM
Platform enterprise value: $187.5MM
The partner firms together generate the platform's revenue, EBITDA, and enterprise value. Each partner receives a pro-rata share of the platform's profitability plus a direct equity stake in Varium — additional value on top of your current value.
| Component | Platform — 10 RIA Firms | Per Partner Firm |
|---|---|---|
| AUM | $5B | $500MM |
| Revenue (75 bps) | $37.5MM | $3.75MM |
| Expense (50% margin) | $18.75MM | $1.875MM |
| EBITDA | $18.75MM | $1.875MM |
| × Multiple | 10× | 10× |
| Operating firm value | $187.5MM | $18.75MM |
| Equity ownership | 50% | 5% |
| Pro rata annual cashflow distribution | $9.375MM | $937,500 |
| Stream 1 — Additional Value from Cashflow Distribution | — | +$9.375MM |
| Stream 2 — Value of Varium Equity | — | +$9.375MM |
| New firm value with Varium Partnership | — | $37.5MM |
| Without Varium | With Varium | |
|---|---|---|
| Firm value | $18.75MM | $37.5MM |
Operating firm value with the cashflow boost ($28.125MM) plus the Varium equity stake ($9.375MM) compounds into a 100% increase in the advisor's total firm value — without adding a dollar of AUM.
*For demonstration purposes only. The figures, assumptions, and outcomes presented above are illustrative and intended solely to demonstrate the mechanics of the Varium partnership model. They do not represent actual results, do not constitute a projection, forecast, or guarantee of future performance, and should not be relied upon as investment, legal, tax, or accounting advice. Actual outcomes will vary materially based on firm AUM, fee structure, expense base, EBITDA multiple, partnership scale, market conditions, regulatory environment, and timing. Equity ownership, distributions, and valuations are subject to the definitive partnership agreements and applicable securities laws. Past results are not indicative of future outcomes. Prospective partners should consult their own advisors before making any decision.
The generic example above explains the cash-flow and value mechanics. To see what they look like for your firm, the calculator builds an honest line-item picture from your real inputs — people, systems, AUM — and compares it side-by-side with the cost of partnering with Varium.
Open the Value Calculator →Why the In-Sourced CIO Model works — the thinking underneath the economics.
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