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Kayne Anderson Rudnick Investment Management Review

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Kayne Anderson Rudnick Investment Management, LLC

Kayne Anderson Rudnick Investment Management, LLC (KAR) is a fee-only financial advisor firm that ranks on SmartAsset’s lists of the top firms in Los Angeles and the top firms in California. There are 17 advisory employees working at KAR, and it manages nearly $24 billion in assets under management (AUM). The firm primarily works with high-net-worth individuals, though its client base also includes various types of institutional investors.

Kayne Anderson Rudnick Investment Management Background

Kayne Anderson Rudnick was established in 1985 by John Anderson, Richard Kayne and Allan Rudnick. Today, the firm is under the complete ownership of multi-manager asset management business, Virtus Investments Partners, Inc.

The firm’s advisory team boasts an impressive number of certifications. There are 20 chartered financial analysts (CFA), seven certified financial planners (CFP), two certified private wealth advisors (CPWA), one chartered retirement planning counselor (CRPC), one certified trust and financial advisor (CTFA), one certified public accountant (CPA), one chartered alternative investment analyst (CAIA) and one advisor with a certificate in investment performance measurement (CIPM) on staff. 

What Types of Clients Does Kayne Anderson Rudnick Investment Management Accept?

Nearly 86% of Kayne Anderson Rudnick’s roughly 1,100 clients are individual investors, most of whom have a high net worth. KAR works with many other types of clients, though, including families, trusts, estates, professional and religious organizations, charitable organizations, endowments, corporations, pension plans, profit-sharing plans, insurance companies, registered investment advisors (RIAs), collective investment trusts, investment companies, private pooled funds and banks.

Kayne Anderson Rudnick Investment Management Minimum Account Size

Depending on what type of client you are and which services you want, Kayne Anderson Rudnick will alter the minimum amount of investable assets it requires. Here are the firm’s minimums:

  • Private client accounts: $1 million
  • Wrap program accounts: $50,000-$250,000, depending on your investment strategy
  • Small-cap, emerging markets small-cap and global small-cap institutional accounts: $25 million
  • All other institutional accounts: $5 million

Services Offered By Kayne Anderson Rudnick Investment Management 

As its name indicates, investment management services are a major part of what Kayne Anderson Rudnick Investment Management offers. The firm provides an extensive set of financial planning services as well. Here is the firm’s full list of services available:

  • Investment management
    • Investment research
    • Security selection strategies
    • Internal tax and investment volatility management
    • Consistent rebalances
  • Wealth management
    • Financial planning
      • Retirement planning
      • Estate review
      • Tax planning
      • Charitable gift planning
      • Risk mitigation and insurance review
      • Asset, liability and cash flow analysis
    • Investment advisory
      • Tax minimization
      • Multi-strategy approach
      • Customized asset allocations
      • Constant client-advisor communication
    • Consulting
      • Investment policy statement creation
      • Asset allocation and overall portfolio design
      • Investment manager due diligence and selection
      • Portfolio transitioning
      • Portfolio trading cost analysis
    • Executive services for employee stock options

Kayne Anderson Rudnick Investment Management Investment Philosophy

Research is at the core of Kayne Anderson Rudnick’s investment strategy. The firm prefers to maintain control over its investment decisions as opposed to outsourcing the research work to an outside company. KAR’s process includes reviewing a company’s balance sheet, financial statements, regulatory filings, press releases and other industry data to ensure that it has a complete financial picture prior to investing.

As you might expect based on the above information, KAR principally invests in equities when building client portfolios. It divides these possible investments into large-cap, mid-cap and small-cap categories so that its advisors can easily pair them with a client’s risk tolerance and other needs.

Fees Under Kayne Anderson Rudnick Investment Management

Kayne Anderson Rudnick Investment Management has different fee rates for its various client and portfolio types. The firm charges asset-based fees, and its rates decrease the greater the value of the portfolio. Although the firm lists an annual rate, it charges clients on a quarterly basis. Depending on a client’s agreement with his or her advisor, a client can elect to pay these fees either in arrears or in advance. The firm also allows clients to set up direct payment from their accounts, or clients can elect to be billed separately.

KAR has a larger fee schedule than what is shown in the tables below, but we have chosen to include only the rates for the firm’s most commonly used services.

Wealth Advisory Client Fees
Portfolio Value Annual Fee
First $3MM 1.00%
Next $2MM 0.80%
Next $5MM 0.70%
Above $10MM 0.60%

 

Fees for Institutional U.S. Large-Cap Equity Portfolios
Portfolio Value Annual Fee
First $10MM 0.70%
Next $25MM 0.55%
Next $50MM 0.45%
Above $85MM 0.35%

 

Fees for Institutional U.S. Small-Cap Equity Portfolios
Portfolio Value Annual Fee
First $25MM 1.00%
Next $25MM 0.80%
Above $50MM 0.70%

Note that the rates listed above are not necessarily set in stone. KAR states in its Form ADV (SEC-filed paperwork) that rates may be negotiable for certain clients.

Check out the table below to see how Kayne Anderson Rudnick’s fees for its asset management services compare. Note that these fees are only estimates and actual costs may vary.

*Fee estimates only consider the maximum base fees for the services each firm provides. You may also pay manager fees and other fees, which can vary in amount. **All figures are based on median fee levels according to Bob Veres' 2017 Planning Profession Fee Survey. The above estimates solely take into account AUM-only fees. Total costs will likely be higher due to additional expenses.
Estimated Fee Comparison*
Your Assets Kayne Anderson Rudnick Investment Management Wealth Advisory Client Services National Median Advisory Fees**
$500K n/a (below required minimum) $5,000
$1MM $10,000 $8,500 - $10,000
$5MM $46,000 $25,000 - $32,500
$10MM $81,000 $50,000

What to Watch Out For

Kayne Anderson Rudnick almost exclusively uses stocks in client portfolios. Individual stocks are generally riskier investments than other inherently diversified investment types, such as index funds and exchange-traded funds (ETFs). KAR does not appear to utilize any of these investments, at least not on a large scale. However, KAR’s advisors will work to diversify its stock choices for your portfolio.

Additionally, the firm does have one disclosure. More information is provided below.

Disclosures

Kayne Anderson Rudnick Investment Management has one disclosure, which, for context, isn’t unusual for a firm of this size. In July 2018, The Financial Supervisory Authority of Norway (Finanstilsynet) alleged that KAR did not release legal notification in accordance with Norwegian federal law disclosing that it held a large ownership share in a Norwegian company. The incident resulted in an $18,500 fine for KAR. 

Opening an Account With Kayne Anderson Rudnick Investment Management

If you’re interested in becoming a client, the best way to get in touch with Kayne Anderson Rudnick Investment Management is to either call the firm at (800) 231-7414 or email the firm at info@kayne.com.

Where Is Kayne Anderson Rudnick Investment Management Located?

Kayne Anderson Rudnick is headquartered in Los Angeles. Its office is situated in the northwest corner of Los Angeles at 1800 Avenue of the Stars, which is directly off of Santa Monica Boulevard.

Tips for Managing Your Investments

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How Many Years $1 Million Lasts in Retirement

SmartAsset's interactive map highlights places where $1 million will last the longest in retirement. Zoom between states and the national map to see the top spots in each region. Also, scroll over any city to learn about cost of living in retirement there.

Least
Most
Rank City Housing Expenses Food Expenses Healthcare Expenses Utilities Expenses Transportation Expenses

Methodology SmartAsset calculated the average cost of living for retirees in the largest U.S. cities. Using that calculation, we determined how many years $1 million would last in retirement in each major city.

First, we looked at data from the Bureau of Labor Statistics (BLS) on the average annual expenditures of seniors throughout the country. We then applied cost of living data from the Council for Community and Economic Research to adjust those national average spending levels based on the costs of each expense category (housing, food, healthcare, utilities, transportation and other) in each city.

We assumed the $1 million would grow at a real return (interest minus inflation) of 2%, reflecting the typical return on a conservative investment portfolio. Finally, we divided $1 million by the sum of each of those annual numbers to determine how long $1 million would last in each of the cities in our study.

Sources: Bureau of Labor Statistics (BLS), Council for Community and Economic Research