A.G.P./Alliance Global Partners Select Altigo to Streamline its Alts Program
March 21, 2023 | Altigo
A.G.P./Alliance Global Partners, a full-service investment firm and SEC-registered broker-dealer, has chosen Altigo as its digital solution to streamline its alternative investment program. A.G.P. will benefit from platform features that make the subscription process easier and more efficient for both reps and the home office.
Altigo integrates all aspects of alternative investment subscription and compliance, while significantly reducing not-in-good-order (NIGO) errors and other administrative headaches. The platform will help A.G.P. manage its alts paperwork and grant approved reps access to all their firm-approved alternative investment offerings in a single, white-labeled portal.
Altigo’s Supervision Assistant feature will help A.G.P. establish thorough suitability review and other home office supervision processes that can be completed in one streamlined workflow, as well as simplify and condense document review using a repeatable digital process.
Altigo and WealthForge CEO Bill Robbins said, “Technology must be flexible enough to adapt to the way your clients want to do business, and we’re excited that Alliance Global Partners is working with our team to customize their alts investment experience. Straight-through processing is going to make it easier for A.G.P. to deliver value to their reps, increase the quality of their sales supervision and operational control, and simplify the compliance review process.”
About Alliance Global Partners
Alliance Global Partners (A.G.P.) is a regional investment and advisory firm that has been a member of FINRA and registered with the SEC since 1980. A.G.P. specializes in wealth management and the middle market institutional arena. We have Full-Service capabilities with a global ability to handle domestic as well as international customers. A.G.P. prides itself on providing its clients with boutique-level services along with the confidence of knowing their assets are held at Fidelity Clearing and Custody. Whether a client is looking for wealth management advice, Institutional services, or investment banking, we have a track record and a proven team to assist. We pride ourselves on long-lasting relationships with our clients, ranging from some of the largest institutions and crossing over to the individual investor. We strive to make sure your interests become our interests.
About Altigo
Altigo is the leading open network alts subscription technology used by a community of 300+ sponsors, broker-dealers, and RIA firms. The platform enables secure electronic alternative investment transactions between asset managers, wealth advisors, custodians, and transfer agents. With over 11,000 alts subscriptions completed on the platform since its debut in mid-2019, Altigo’s adoption reflects the valuable benefits it provides to reps and advisors including diverse product offerings, nearly error-free paperwork, and lightning-fast order entry. Altigo’s team of experienced professionals is committed to client experience, adding new features on a regular basis and helping its ever-expanding client base streamline investment workflows and eliminate reliance on outdated paper subscriptions and snail mail.
March 14, 2023 | Winston Crowley Stephen DuMont and Jason Weiler | UMB
Around this time last year, much of the U.S. Treasury curve was sub 2%, the consumer price index (CPI) year-over-year had steadily been climbing (7.9% in Feb. 2022 and still on the rise), core personal consumption expenditures (PCE) year-over-year was 5.40% and the Federal Open Market Committee (FOMC) was preparing markets for Fed target rate hikes. We ultimately saw liftoff with a 25 basis point (bps) hike on March 16, 2022.
Fast forward a year: Treasuries were well north of 4%, CPI year-over-year and PCE year-over-year have remained stubbornly high (6.4% and 4.70% respectively in Jan. 2023) despite the FOMC hiking 450 bps and potentially positioned for more.
What a difference a year makes (see chart). The sharp pace of the Fed Rate increases throughout much of last year and the subsequent climb in Treasury yields resulted in escalated unrealized portfolio losses industry-wide. Significant unrealized losses were something many were unaccustomed to seeing in their portfolios for several years during the low-rate era, but the combination of the lowest rates in history during the pandemic and the fastest pace of tightening in nearly 50 years produced runaway unrealized losses.
Yet, it is important to note, the other side of those unrealized losses is that today’s reinvestment yields are much higher. Thus, the laddered portfolio many built over the years should be able to reinvest roll-off in significantly higher yields.
Notes from the CEO: Perspective on the recent banking industry news
March 16, 2023 | Mariner Kemper | UMB
The news cycle has been dominated by the banking industry, and specifically developments related to the failures of Silicon Valley Bank (SVB) and Signature Bank. I would like to provide an update and perspective that summarizes our reaction to the events and news.
Regarding stock performance, the entire banking sector saw a significant decline in stock prices on Monday. Investors reacted to the news media and other sources without the benefit of context from UMB. After the market closed, we filed a Form-8K to explain our position.
UMB shows up as having a high “unrealized loss” position. It’s important to note that any loss only becomes realized if it is sold prior to maturity. In the rapidly rising rate environment, all banks have experienced a reduction in the value of their securities portfolio, as represented by the unrealized losses, or “AOCI.” UMB’s AOCI represents approximately 10% of our available-for-sale (AFS) portfolio balances, which is in line with peer levels. This does not impact regulatory capital ratios, which is the true measure of safety and soundness. UMB doesn’t intend to sell AFS securities.
How Broker-Dealers Are Staying on the Right Side of Reg BI
March 2, 2023 | John Rickman | Altigo
As more retail investors enter the market, regulators have moved to raise the broker-dealer standard of conduct beyond mere “suitability” obligations. Broker-dealers and their representatives are now expected to act in the “best interest” of the retail investor and be boldly transparent about any conflicts of interest that might arise from their sales activity.
The Securities and Exchange Commission first adopted its Regulation Best Interest (Reg BI) rules in 2019 to improve the quality and transparency of retail investors’ relationships with broker-dealers, bringing its legal and disclosure requirements in line with “reasonable investor expectations.” The agency then gave firms time to up their compliance game.
Now comes the enforcement push. In a January 30 risk alert, the SEC put firms on notice that recent retail-focused examinations of broker-dealer compliance practices revealed numerous “deficiencies and weaknesses” that could erode investor trust in the financial system. Many of the faults that agency examiners found were common pitfalls related to the rules’ disclosure and care obligation requirements such as:
• Generic written policies and procedures not tailored to a firm’s business model
• No clearly written procedures for creating, reviewing, updating, and distributing disclosures
• No process to show that disclosures had been provided to customers prior to or at the time of the recommendation
• Vaguely worded policies and procedures that make it difficult for firm representatives to consider “reasonably available” investment alternatives, investment costs, and methods for documenting the basis for a recommendation
The SEC has indicated it intends to continue its examinations and both it and the Financial Industry Regulatory Authority (FINRA), the self-regulatory organization that governs wealth managers, have already begun doling out sanctions against financial professionals for violating Reg BI. As early as September 2022, FINRA sanctioned one registered representative for “excessive” trading in a customer account.
As the crackdown ramps up, broker-dealers have begun sharing best practices amongst themselves, knowing that if one of its competitors gets sanctioned, so might their firm. Altigo has gleaned some of these best practices after years of onboarding dozens of broker-dealer firms that use our technology platform for alternative investments.
Many such best practices focus on how firms create, update, and distribute the three key disclosure docs they must file and furnish to investors (whether they make recommendations or not), specifically Form CRS—which summarizes material information about the firm and aims to helps its representatives develop trust with customers—and both the individual firm and registered representative Reg BI disclosures. These three forms are typically delivered to the customer together and are generally considered living documents in that they are regularly updated to reflect new disclosures or other information.
Other best practices these broker-dealer firms recommend include:
• Adding additional suggested questions to existing disclosure documents. These questions encourage customers to ask firm reps about potential conflicts of interest as well as help reps gather more information about their customers.
• Reviewing and updating on a quarterly basis firm and firm representative conflict registers, which help broker-dealers identify, mitigate, and remove potential conflicts of interest.
• Distributing disclosure docs prior to or concurrent with a recommendation. This is standard practice, but some firms have fallen into the bad habit of providing customers with disclosures as part of subscription paperwork. It’s too late by then because distributing disclosures along with “sub docs” suggests a recommendation has already been made.
• Reviewing Reg BI policies and procedures on a frequent basis to ensure firms stay current with the rules they write to stay compliant. Annual reviews are standard practice but that’s probably not enough in light of the enforcement push.
• Redistributing disclosures after each update to ensure customers always have the most up-to-date versions.
• Training registered representatives and other staff on a firm’s compliance processes, including Reg BI.
Concurrent with FINRA’s August 3, 2022 regulatory notice warning about electronic signature forgery, broker-dealers are also strongly urged to get prior permission from customers to send disclosures and other notices electronically. Emailed disclosures aren’t compliant if the customer hasn’t consented to electronic delivery.
Many of these recommendations can be automated and broker-dealers that employ technology solutions like Altigo to help document disclosure activity, among other compliance processes, are at an advantage. Should the SEC or FINRA come calling, digital solutions can also help firms automate disclosure updates and distribution, set guardrails that restrict premature disclosure distribution, and generate reports for auditors.
First to market? Three questions for your fund distribution services partner
March 7, 2023 | UMB
Asset managers seeking to be first-to-market with an investment strategy or product wrapper should develop a distribution plan as they develop the product itself. Understanding the current marketplace, onboarding requirements and platform fee economics is critical to the long-term success of your product. Due to the complex nature of distribution relationships and the many considerations that go into a successful product launch, we often consult with asset managers well ahead of any SEC filings, the drafting of a prospectus or any compliance reviews.
This upfront process allows managers to gain valuable insights from their potential distributions services partner and, when the time comes, to move faster and with greater assurance. Unfortunately, we have heard far too many times of asset managers going to market without the proper share class or fee structure to support their distribution efforts. These types of roadblocks or delays can be reduced by collaboration with an effective distribution partner in the early stages of product development.
Market opportunity and outlook for interval and tender-offer funds
February 24, 2023 | UMB
Unlisted closed-end funds (CEFs) have maintained their momentum even after several years of significant growth, surpassing $100 billion in assets under management (AUM) in 2022, an all-time record for the category, which is made up of interval funds and tender-offer funds.
Not surprisingly after colossal new-product growth in 2021, assets raised by new products slowed in 2022, which is shown in our latest research, compiled in partnership with FUSE Research Network.
The research indicates that the market for unlisted CEFs is beginning to show signs of maturation, but this set of fund structures continues to exhibit the potential for continued growth in assets.
It’s Time to Seriously Consider a Documentation Management Tool
February 22, 2023 | Debbie Miller | Docupace
Documentation management tools are a must for any wealth management business that wants a robust digital presence. And if that isn’t you yet, it should be. In recent studies, 77% of financial advisors reported losing business because they lacked the appropriate digital tools clients expected. The same research found that 85% of wealth management business leaders rated partnering with third-party companies as important in both the short and long term.
The need for online platforms that manage customer data, streamline business operations and improve customer satisfaction rates is only growing. Clients expect a seamless and personalized experience, which can only be delivered with the right software solutions. Turning traditional paper documents into cloud-based versions is one important piece of the digital transformation jigsaw.
Welton Investment Partners Announces Partnership With iCapital® to Provide the Wealth Management Community With Access to Its Multi-Strategy Macro Program
February 15, 2023 | iCapital
Welton Investment Partners (Welton), the alternative investment manager focused on the pursuit of consistent returns across market environments, today announced the firm’s strategic partnership with iCapital, the leading global fintech platform driving access and efficiency in alternative investing for the asset and wealth management industries. The new partnership provides the wealth management community access to Welton’s systematic investment capabilities, including its multi-strategy macro program.
Last year, Welton announced the launch of its newly formed wealth management group, led by alternative investment strategy veteran William Marr. iCapital’s platform enables streamlined access to Welton’s institutional quality investment solutions to the wealth management community, including brokerage houses, RIAs, private banks, and family offices. The platform’s customized end-to-end technology solution digitizes the subscription, administration, operational, and reporting processes for investing in alternatives, creating more opportunities for wealth managers and their clients to efficiently access these investments.
When Might “Golden Vintages” Appear in Private Markets?
January 24, 2023 | CAIS
In our previous analysis, we found that private equity funds that deployed capital in relatively lower valuation environments and recessionary environments tended to outperform those with other vintages. In the following article, we expand the analysis to the sub-asset class level and assess the potential importance of entry point and vintage diversification as it relates to recessions.
If you’ve seen one fact sheet, you’ve seen them all. Stats are crammed in and there’s no white space. That poor fact sheet is trying to fit every little bit of information about your product into one page, because we all know the second page is full of disclosures.
WHAT IF YOUR FIRM WANTS TO TAKE A DIFFERENT APPROACH TO THIS CRITICAL MARKETING PIECE? LET’S DISCUSS SOME THINGS YOU CAN HIGHLIGHT ON YOUR FACT SHEET TO MAKE IT DO ITS JOB BETTER AND GIVE ADVISORS A QUICK OVERVIEW OF YOUR PRODUCT.
Beyond the Numbers
When creating a fact sheet, go beyond the numbers. While your stats are important, they don’t all need to be on the fact sheet. Highlight some key points advisors need to know, but don’t include every single bit of information. Keep in mind you can also create other pieces, like a terms sheet that details the exact terms of the offering. Sometimes our focus gets so granular that we forget to think outside the box.
Highlight Your Firm’s Best Qualities
The next focus should be to highlight your firm’s qualities on your fact sheet. What is your firm known for? What about your firm stands out with advisors? Where is your experience focused? Investment objectives and legalese are a dime a dozen…bring out what really makes your firm unique.
Make Your Images and Graphics Stand Out
We often see asset managers wanting to make their fact sheets look just like other firm’s fact sheets. While we agree there are some key components to fact sheets, they don’t need to all be identical. Use graphics and images to make your fact sheet easier to read and to help get your story across. They say a picture is worth a thousand words, and that works here too. If you have the right graphics, you’re going to pique their interest.
You’re motivating advisors to reach out to your wholesalers, ask questions and even to set up meetings. It’s a conversation piece to drive towards the end goal of getting their business.
IF YOU WOULD LIKE US TO TAKE A LOOK AT YOUR FACT SHEET AND GIVE YOU SOME IDEAS ON HOW WE THINK YOU CAN IMPROVE IT, OR HELP YOU CREATE YOUR NEXT FACT SHEET, CONTACT US TODAY.
Gentry Mills Joins Altigo’s Growing Roster of Sponsors
February 15, 2023 | John Rickman | Altigo
Real estate investment firm Gentry Mills Capital has signed with Altigo, expanding the pool of asset managers on the platform and making investing in alts easier for the 200+ transactional broker-dealer and RIA firms that use Altigo. In partnering with us late last year, Gentry Mills had the distinction of being the 50th sponsor in 2022 to sign with Altigo.
After hearing about Altigo from their distribution partners, sponsors are discovering the benefits of investments being completed quickly and correctly the first time. Altigo integrates all aspects of alternative investment subscription and compliance, while significantly reducing not-in-good-order (NIGO) errors and other headaches. The platform will help Gentry Mills manage paperwork and make their real estate investment offerings available in a single, white-labeled portal.
“We’re excited about our partnership with Altigo and the positive impact it will have on our processes, especially in terms of making things more convenient for our clients who are financial advisors,” said Gentry Mills President Billy Glass. “Any tool that makes us more accessible or user friendly to our clients is a tool we want to utilize.”
Altigo allows asset managers to invite their distribution partners to their own branded portal on the platform to view available offerings, or to add their offerings to their partners’ portals. In either case, Altigo streamlines the alts investment process through the use of digital workflows and by bringing the process and all of its participants under one virtual “roof.”
Altigo Chief Revenue Officer Mat Dellorso said, “Altigo’s scalable subscription technology and compliance services for alternative investments are pillars supporting an overall mission to increase transparency, efficiency, and access to alternative investments for issuers and advisors. We welcome Gentry Mills to the platform and look forward to collaborating with their team on making their offerings easy to access and subscribe to.”
About Gentry Mills Capital
Gentry Mills Capital is a real estate investment firm whose purpose is to seek out, package, and provide quality commercial real estate investment opportunities. We have raised over a quarter of a billion in capital with over $1 billion in assets acquired and over $500 million in AUM. With a wealth of experience in the commercial real estate industry, our success is a result of our commitment to quality investment opportunities, transparency, and unsurpassed customer service.
About Altigo
Altigo is the leading open network alts subscription technology used by a community of 300+ sponsors, broker-dealers, and RIA firms. The platform enables secure electronic alternative investment transactions between asset managers, wealth advisors, custodians, and transfer agents.
With over 11,000 alts subscriptions completed on the platform since its debut in mid-2019, Altigo’s adoption reflects the valuable benefits it provides to reps and advisors including diverse product offerings, nearly error-free paperwork, and lightning-fast order entry.
Altigo’s team of experienced professionals is committed to client experience, adding new features on a regular basis and helping its ever-expanding client base streamline investment workflows and eliminate reliance on outdated paper subscriptions and snail mail.
How the Inflation Reduction Act levels the renewable energy playing field for municipalities
January 30, 2023 | Scott Crist | UMB
The recently passed Inflation Reduction Act has changed the way municipalities can structure and finance their renewable energy projects. Local governments can now access renewable energy incentives directly, a means of financing projects historically unavailable to them.
Municipalities considering renewable energy projects for their communities just received a big boost from the Inflation Reduction Act (the Act) enacted by Congress in August 2022. Historically, development of renewable energy projects has been driven by federal and state incentives, including federal tax credits. Since municipalities and other 501(c)(3) organizations don’t pay taxes, they haven’t been able to take advantage of many of these incentives directly. As a result, most projects have been structured and financed through private ownership, at least for a period of time, in order to fully capture the benefit of these tax credits.
The newly created provisions of the Act changed all of this. Now there’s a new alternative that allows municipalities and tax-exempt organizations to access certain incentives directly through the receipt of direct payments from the U.S. Treasury in lieu of receiving tax credits. This provision seeks to level the playing field between taxpaying and non-taxpaying entities and eliminates the need for private ownership of renewable energy projects.
Phoenix American Financial Services Announces New Client Partnership with Wander REIT for Fund Administration
January 24, 2023 | Phoenix American
Phoenix American is pleased to announce its new client partnership with real estate investment fund sponsor Wander. Phoenix American will fulfill the transfer agent, fund accounting and back-office operational needs of Wander with the company’s industry-leading investor services platform featuring the state-of-the-art STAR-XMS shareholder management / transfer agent system and integrated fund accounting service. Wander will benefit from Phoenix American’s combination of advanced technology, partner-oriented client service and long experience with the unique operational requirements of alternative investment real estate funds.
Smart Vacation Homes in Inspiring Places
Wander is an alternative real estate fund sponsor specializing in building a network of short-term rental smart homes across the globe that guests can access with the tap of a button. Wander was founded to solve the problem of the frustrating experiences of trying to work while traveling: uncomfortable beds, unreliable internet connections and uninspiring locations. Wander owns and offers smart homes with full amenities in inspiring places across the United States with new locations launching every month. The Wander Atlas REIT offers investors access to competitive investment returns in this emerging real estate sector.
“It was important to us to leverage a sophisticated third-party fund admin with a strong track record,” said John Andrew Entwistle, Founder and CEO of Wander. “Phoenix American is by far the best we evaluated. They’ve been a perfect partner.”
50 years of client-oriented fund administration
With the growing variety and sophistication of alternative investment funds and the increasing demands of both investors and regulators, advanced operational solutions are critical to the success of today’s fund sponsors. Phoenix American has combined the most efficient systems and precision back office processes in alternative investments since its origins as a fund sponsor in 1972. Phoenix American’s industry-leading STAR-XMS transfer agent system is the result of the company’s direct experience as a fund sponsor as well as decades of experience as an administrator for alternative investment funds.
“Wander is an innovative company at the cutting edge of the way people travel today,” said Andrew Constantin, Chief Operating Officer at Phoenix American. “We like working with innovative firms and look forward to being a part of the success of the Wander Atlas REIT.”
About Phoenix American
Phoenix American Financial Services, Inc. provides back office outsourcing services including fund administration, fund accounting, transfer agent services, investor services and sales and marketing reporting to management firms in the alternative investment industry. The Phoenix American aircraft group, including its Irish subsidiary, PAFS Ireland Limited, provides managing agent services for asset-backed securitizations (ABS) in the commercial aircraft and engine leasing industry. Phoenix American is an affiliate of Phoenix American Inc. along with Phoenix American SalesFocus Solutions. Phoenix American has five offices worldwide, was founded in 1972 and is headquartered in San Rafael, CA.
With lingering economic uncertainty continuing to shake up client portfolios, more and more firms are embracing straight-through processing technology—and choosing Altigo to streamline their alts business. In 2022, Altigo reached new milestones in adoption and volume, reflecting a snowballing network effect that continues to take hold among broker-dealers, RIAs, and sponsors who benefit from the efficiency and automation our technology provides.
Today we take a look back at a whirlwind year of growth and teamwork, all made possible by our clients and passionate team of professionals who strive to make Altigo the leading open network subscription processing platform for alternative investments.
Altigo by the Numbers
Altigo continued to grow last year, crossing the $2 billion mark in total lifetime alternative investment volume completed on the platform in July—just seven months after hitting $1 billion. Altigo finished 2022 just shy of $3 billion in total lifetime investment volume across nearly 11,000 unique transactions, seeing roughly $150 million in investment volume transacted each month before the year ran out. Looking at the numbers from another vantage point, Altigo generated 50% of its total lifetime investment volume in 2022 alone—an impressive result considering last year’s risk-averse investment environment.
These results clearly show that the industry is continuing to move away from the cumbersome, manual processes associated with investing in alternatives, and Altigo is the technology that broker-dealers, RIAs, and sponsors are choosing to simplify the process.
Indeed, there are currently more than 100 sponsors on the platform—50 of whom signed with Altigo in 2022—breaking our record for the most sponsors to sign up in a single year. This further diversifies the types of offerings available on Altigo, providing a wider array of offerings for the 200+ transactional broker-dealer and RIA firms that use the platform. Today, Altigo supports a range of alternative investment offerings, including direct private placements, private equity funds, DSTs, interval funds, non-listed preferreds, non-listed REITs, non-listed BDCs, and qualified opportunity zone funds.
2022 also saw a number of broker-dealer firms such as American Trust Investment Services, Cabin Securities, Newbridge Securities Corporation, and Titan Securities join firms like Concorde and Kingswood on Altigo. Many of these firms now require all their reps to use Altigo when allocating to alternatives. That’s because these firms have found that using Altigo creates efficiencies in home office supervision and onboarding, while making it easier for their reps to deliver a full range of investment solutions that align with their clients’ financial goals.
Top 5 Altigo Enhancements in 2022
In 2022, we added fresh features to Altigo to create better experiences and workflows for both home office personnel and the reps and advisors they supervise. Here’s a summary of the top 5 features that were added to the platform last year:
1. Supervision Assistant: This new tool helps firms simplify, centralize, and de-risk suitability review and other compliance requirements by automating compliance checklists and completing concentration worksheet calculations—giving supervisory principals more time back in their day. It also lets firms manage workflows by exception and highlight areas for review.
2. Covered Securities Blotter: This tool enables firms to subscribe to interval funds, preferred shares, tender offer funds, and other covered securities in the same place where they manage the rest of their alternatives business. Using a simplified digital application form, firms can batch transactions and submit them in a bulk purchase order to sponsors, while still routing them through supervision, compliance, and other systems that a firm normally uses.
3. Custodian and Sponsor Enhancements: Custodians can use Altigo to review, approve, and otherwise process investments that come through the platform. Users can also automate document delivery to custodians, removing the need for advisors or home office staff to manually send documents to their custodian. Enhancements for sponsors now include allowing a sponsor signer to be included in the processing flow. This means subscription documents can be countersigned by the sponsor via Altigo’s workflow instead of manually signing the completed document package.
4. Form Enhancements: Altigo continues to add new functionality for proprietary broker-dealer home office, sponsor, and custodian forms. Users can now run calculations off of form data fields, and updates to the Form Data step in Altigo make it easier for advisors and assistants to differentiate and navigate between forms.
5. Scaled-Up Automation Data Exchange: We’ve enhanced our data transfer and integration capabilities, making it possible to connect to more systems and other fintech tools and platforms more quickly. This, in turn, will expand our partner ecosystem and enable straight-through processing to transmit our partners’ data to their preferred systems, clients, and vendors.
We continued to hear positive feedback from our clients throughout the year:
“These guys have been absolutely great. They went to our conference, they talked to our reps, they did individual training—they walked us through the entire process. Change from the old-fashioned way of submitting paperwork can be difficult but the continued training, communication and support from the team truly sets Altigo and the team apart.” Rick Carlesco, CEO, IBN Financial Services.
“We look forward to Altigo setting a new standard of service for our registered representatives and advisors as well as for their supervision. Straight-through processing provides reduced regulatory risk and the satisfaction of knowing that submissions will be in good order the first time—giving our supervisors more time to supervise rather than micromanage paperwork,” said Kurosh Golchubian, Chief Technology Officer at Newbridge Securities.
“The Altigo platform has been absolutely amazing to use—it’s simple and straightforward and easy to duplicate the same client information if you have more than one application. This has saved me hours of time and allowed me to get more work done in a single day instead of my time being used up filling out paperwork,” said Justin Smith, RIA, American Trust Investment Services.
“The quick, 30-day turnaround time from signing up with Altigo to our reps going live on the platform exceeded our expectations, and our reps are completing transactions in minutes. Straight-through processing has already lowered our operational burdens as Vestech reps have begun using Altigo,” said Vestech Chief Compliance Officer Marco Ramirez.
Looking ahead to 2023, Altigo will continue to deliver enhancements, including new platform integrations and more features to help broker-dealer home offices. For instance, we are working to make it easy to process additional forms and documents on Altigo that aren’t directly associated with alts subscriptions such as account change paperwork, account maintenance paperwork, Reg BI forms, and much more. And of course, we will continue to build out our ecosystem of partners and industry collaborators to create the best experience for our clients—and meet increasingly important needs in the world of alternative investments.
Want to learn more about what’s in store for Altigo this year? Look for us us at the Blue Vault Bowman Alts Summit, March 6-8! We’re thrilled to be sponsoring and presenting at this event, where you can to discover how incorporating alternative investments into your practice can expand your overall business and client base!
Visit our brand new website rolled out in 2022 to learn more about Altigo.
HOW GREAT DOES IT FEEL TO BE ASKED TO PARTICIPATE IN A TASK FORCE TO PLAN AN INDUSTRY CONFERENCE? PRETTY DARN GREAT.
Planning the Summit Conference
That’s how Cherie felt when Stacy Chitty from Blue Vault, asked her to participate in the task force to plan the upcoming Blue Vault Bowman Alts Summit 2023. This conference is focused on alternative investments.
We’ve been hearing for a long time that the 60/40 portfolio is no longer working. Alternative investments are the way to help the financial industry break out of that mold…although it’s been a bit slow moving to do it.
A Wide Range of Alternative Investments
What we’re doing on the Alts Summit task force is looking at the different types of content that advisors need to know to understand alternative investments. This includes making sure that a wide range of product sponsors are present at the conference. It also includes making sure that whether an advisor is new to alts or has been offering them for some time, there are educational opportunities for everyone.
In addition to product sponsors, we’ll be hearing from industry experts on topics like technology, compliance, and marketing in relation to alternatives, as well as advisor practice management.
Register Today
If you haven’t registered yet, plan on joining us in Atlanta, March 6th through March 8th for the Blue Vault Bowman 2023 Alts Summit.
WE LOOK FORWARD TO SEEING YOU THERE AND HELPING YOU LEARN MORE ABOUT HOW YOU CAN INCORPORATE ALTERNATIVE INVESTMENTS IN YOUR PRACTICE. REGISTER NOW.
Does your website provide a compelling journey for financial advisors, or is it a confusing maze of information? If you haven’t positioned your website as the start of your client journey, you’re missing out on a key engagement tool.
BELOW WE’LL DISCUSS THREE WAYS TO IMPROVE YOUR WEBSITE AND ENGAGE FINANCIAL ADVISORS TO A GREATER LEVEL.
First, we’ll talk about how to design your website for financial advisors. Second, we’ll cover the information that will help them stay on your site longer. And third, we’ll discuss what you want them to do next.
Customizing Your Website
Let’s talk about customizing your website to financial advisors. In our industry, there are a lot of facets of business that commercial real estate or asset managers are involved in. There are different types of businesses, lines of business and investment strategies and sometimes we try to do a one size fits all approach to websites.
That can end up being too much information for financial advisors. So, it’s important to develop a specific path you envision advisors going down or develop a site that is specific to advisors.
Website Stickiness
How do you keep advisors on your website for longer? As you’re thinking about developing a site, think about what advisors want to know, their frequently asked questions and how to engage them. It’s a balance of giving them the information they need without providing too much information. Think about how to keep them engaged and capturing more of their time, so they go further and further into your content.
Tell Them What to Do Next
Finally, tell the advisors what you want them to do next. Do you want them to contact you for more information or to set up a meeting with your sales team? Make sure your calls to action are clear on your site.
WE CAN HELP IMPROVE YOUR WEBSITE
If you need help improving your website to engage financial advisors, please reach out to us and we’d be happy to help.
What’s one of the first things people do when they meet you or see one of your posts on LinkedIn? They check out your LinkedIn profile.
PLAN TO USE LINKEDIN TO ITS MAXIMUM POTENTIAL TO SHOW YOUR CREDIBILITY AND GAIN TRUST WITH PROSPECTS AND CLIENTS.
LinkedIn Newsletter
A great way to do that is through the LinkedIn newsletter, which is a newer feature. It allows you to publish an article each week. And by doing that, you can stay in front of your prospects in a really easy way.
First, think about what to talk to your prospects about. What’s a short and compelling topic? It doesn’t have to be a long white paper length piece of content. Next, think about your target audience and what they’re interested in learning about from you, what their pain points are or new information that might benefit them.
Setting up Your Newsletter
To set up your newsletter on LinkedIn, go to the same place you want to make a post.
• Click on this prompt and there will be a section that says, “write article”.
• Once you click on this function, if you have creator mode, you’ll have the option to create a newsletter.
• A nice function with LinkedIn is when you create that first newsletter article, it sends a notification to all your first level contacts in LinkedIn and sends them an email to notify them you now have a newsletter and invite them to subscribe.
• This is a great way to engage with every contact. Subscribers will be notified every time you publish a newsletter article. We suggest publishing a newsletter once a week.
Using a Newsletter to Your Advantage
How are we using the LinkedIn newsletter article? When we do the videos you see on LinkedIn, we’re turning them into our LinkedIn newsletter articles as well. It’s a great way to multipurpose content and use the LinkedIn newsletter articles to stay in front of your prospects.
IF YOU NEED HELP CREATING A LINKEDIN NEWSLETTER ARTICLE OR WANT TO EXPLORE IT FURTHER, GIVE US A CALL.
Phoenix American Onboards New Automated Parking System Fund Sponsor Parking Vault for Fund Administration
December 8, 2022 | Phoenix American
Phoenix American Financial Services (“Phoenix American”) is pleased to announce the onboarding of Delaware Statutory Trust (DST) fund sponsor Parking Vault for fund administration. Phoenix American will support Parking Vault with its industry-leading investor relations platform featuring the STAR-XMS, transfer agent system. Parking Vault will benefit from Phoenix American’s advanced technology, extensive experience with back-office administration for DST’s and focus on outstanding customer service.
Reinventing the Parking Industry One Garage at a Time
Parking Vault is a provider of advanced automated storage and retrieval systems for motor vehicles. The company addresses the challenge of vehicle parking in high-population areas with high density, multi-level automated parking systems that minimize parking time and maximize parking volume at a cost to users equivalent to traditional ramp parking structures. Parking Vault’s systems are able to park 168 cars in the same volume of space that a traditional ramp parking structure requires to park 100 cars while saving motorists the time of searching for a place to park. The $18 million Houston Block 97 DST seeks to provide 1031 exchange investors access to strong investment returns in the traditionally low-yielding parking lot real estate asset class.
“Phoenix American as our fund administrator is an ideal strategic partner,” said Cole McDowell, founder of Parking Vault. “Their ability to deliver an exceptional investor experience and the reporting we need enables us to concentrate on sales and asset performance.”
50 Years of Fund Administration for Alternative Investment Funds
Given increased regulation and investor expectations, deep operational experience with private equity and venture capital funds and advanced technology solutions are critical to the success of today’s fund sponsors. Phoenix American offers the most advanced systems and efficient fund administration processes in alternative investments, servicing all fund structures including DSTs. The company’s industry-leading STAR-XMS transfer agent system, its integrated fund accounting services and customized investor relations are the result of long experience as a fund sponsor combined with its decades of experience as a third-party administrator for alternative investment funds. A full range of back office services include fund accounting, transfer agent services, investor/advisor web portal, tax services, in-house printing and fulfillment as well as full back-office outsourcing.
“Parking Vault is a real innovator,” said Andrew Constantin, Chief Operating Officer at Phoenix American. “Their technology addresses a real need for efficiency and scalability in the urban parking space. Phoenix American shares that spirit of innovation in our technology and services for private funds. We look forward to working with Parking Vault.”
About Phoenix American
Phoenix American provides fund administration services, fund accounting, transfer agent services and full back-office outsourcing to private equity and venture capital fund sponsors. The Phoenix American aircraft group, including its Irish subsidiary, PAFS Ireland Limited, provides managing agent services for asset-backed securitizations (ABS) in the commercial aircraft and aircraft engine loan and leasing industries. The company is an affiliate of Phoenix American Incorporated along with Phoenix American SalesFocus Solutions. Phoenix American has five offices worldwide, was founded in 1972 and is headquartered in San Rafael, CA.
Newbridge Selects Altigo for Enterprise Alts Solution
December 7, 2022 | Altigo
Newbridge Securities Corporation (“Newbridge”), a full-service brokerage and investment banking firm based in Boca Raton, Fla., has selected Altigo as its one-stop technology solution that all its affiliated registered representatives and advisors will use when allocating to alternatives (“Alts“). In choosing Altigo’s straight-through processing technology to power its Alts program, Newbridge joins a growing community of 300+ sponsors, broker-dealers, and RIAs that benefit from the platform’s smart workflow, speedy and accurate transaction processing, and paperless efficiencies.
The partnership ties in with Newbridge’s larger strategy of adopting digital solutions that streamline wealth management services, while enabling affiliated registered representatives and advisors to deliver a constellation of investment solutions that align with their clients’ needs and goals.
“We look forward to Altigo setting a new standard of service for our affiliated registered representatives and advisors as well as for their supervision,” said Newbridge CTO Kurosh Golchubian. “The home office is prioritizing automation of our core capabilities to up our service game and to stay in sync with rising demand for digital-first solutions. Straight-through processing provides reduced regulatory risk and the satisfaction of knowing that submissions will be in good order the first time—giving our supervisors more time to supervise rather than micromanage paperwork.”
Altigo integrates all aspects of alternative investment subscription and compliance, while significantly reducing not-in-good-order (NIGO) errors and other administrative headaches. Newbridge will manage Alts paperwork and enforce suitability and best interest requirements using the platform’s Supervision Assistant functionality rather than with traditional methods such as checklists and spreadsheets. Newbridge will also benefit from having access to all firm-approved alternative investment offerings in a single white-labeled portal. The platform’s ability to integrate with popular CRM and compliance and risk management tools will advance Newbridge’s desire to build a tech stack that will attract new affiliated registered representatives and advisors and clients well into the future.
Altigo and WealthForge CEO Bill Robbins said, “We’re excited to know that Altigo’s transformative technology will provide an enterprise solution for Newbridge’s home office in addition to being a time-saving tool for their affiliated registered representatives and advisors. Placing the firm’s Alts program under one roof while still routing transactions through the same supervision systems Newbridge normally uses will simplify, centralize, and de-risk suitability review and other key compliance requirements.”
About Newbridge
Newbridge Financial, Inc., as the holding company for Newbridge Securities Corporation (www.newbridgesecurities.com) and Newbridge Financial Services Group, Inc. provides strategic management consulting services to growth companies and explores the development of lines of business complementary to but outside of the financial services industry.
Newbridge Securities Corporation and Newbridge Financial Services Group, Inc. provides full-service securities brokerage and investment advisory, and investment banking services to a broad-based group of individuals and corporate clients. Comprised of a committed and experienced team of financial service professionals, we seek to empower our clients to build and preserve wealth by providing superior financial services and products. Newbridge Securities Corporation is an SEC-registered broker-dealer and a member of FINRA and SIPC. Newbridge Financial Services Group, Inc. is an SEC-registered registered investment adviser.
About Altigo
Altigo is the leading open network alts subscription technology used by a community of 300+ sponsors, broker-dealers, and RIA firms. The platform enables secure electronic alternative investment transactions between asset managers, wealth advisors, custodians, and transfer agents.
With over 10,000 alts subscriptions completed on the platform since its debut in mid-2019, Altigo’s adoption reflects the valuable benefits it provides to reps and advisors including diverse product offerings, nearly error-free paperwork, and lightning-fast order entry.
Altigo’s team of experienced professionals is committed to client experience, adding new features on a regular basis and helping its ever-expanding client base streamline investment workflows and eliminate reliance on outdated paper subscriptions and snail mail.
Donovan Ventures Selects Alternative Investment Exchange (AIX) to Power its Oil & Gas Private Equity Investment Offering
December 1, 2022 | Alternative Investment Exchange (AIX)
Alternative Investment Exchange (AIX), the platform making it easy to buy, own, and sell alternative investments, welcomes Donovan Ventures (“Donovan”) to its technology and retail advisor platform. Donovan selected AIX to help automate its subscription document experience as the sponsor and fund distributor enters a new chapter in its 15-year history. Working with AIX will enable Donovan to offer an improved user experience for advisors and investors, as well as better support the sponsor’s capital raising efforts.
Houston-based Donovan is the sponsor firm for a series of Regulation D exempt 506(b) offerings focused on commodity-based, floating income strategies. Powered by Energia.com, Donovan’s private placement offerings allow accredited investors to directly own real property working interest in a diversified portfolio of producing oil and gas shale wells across eight major basins in North America.
Following an exhaustive search of technology providers, it was clear to Donovan that AIX offered the most advanced technology including a breadth and depth of expert talent to ensure success.
Also key to Donovan decision’s in selecting AIX was the platform’s established connectivity to its transfer agent of choice, key custodians, and AI Insight, the educational and compliance platform critical in supporting financial advisors in the alt space.
“By choosing AIX, we are digitizing the subscription document workflow process that improves the experience for RIAs, individual investors, and financial intermediaries,” said Wayne Wagner, Managing Director at Donovan Ventures. “Our goal is to create a seamless workflow experience for the advisor. We believe that aligning with AIX is truly a best-in-class decision.”
Established more than 15 years ago, Donovan Ventures is an energy financial services firm providing private capital solutions via two distinct divisions: asset management and investment banking. The firm has made 14 investments since inception and has advised on over 50 M&A transactions totaling $3.4 billion.
“Under the leadership of Founder and Managing Director, John Donovan, Jr., Donovan Ventures has a long-term track record of success in the oil and gas industry,” explained Joe Ujobai, CEO of AIX. “We are excited to work with the team as they bring their investment expertise to retail investor markets through broker-dealer and RIA distribution channels.”
About AIX:
Alternative Investment Exchange (AIX) is an end-to-end digital platform purpose-built to improve the processes related to buying, owning, and selling alternative investments. AIX’s technology reduces friction, mitigates risk, and creates value across all alternative investing stakeholder groups – wealth managers, asset managers, custodians, transfer agents, and fund administrators. By evolving beyond documents to make data the connective tissue between alternative investment players, AIX makes it easier to conduct business and accelerate industry growth. For more information, please visit aixplatform.com or LinkedIn: linkedin.com/company/aix-alternative-investment-exchange.
Media Contact:
Mark Tordik Broadpath for Alternative Investment Exchange (AIX) 215-644-6503 mtordik@broadpathpr.com
Vestech Securities, a full-service brokerage based in St. Louis, Mo., has selected Altigo as its one-stop technology solution to streamline and de-risk its alternative investment program. The partnership comes amid a concerted effort by the broker-dealer to significantly expand its rep base, concurrent with expectations that alternatives will continue to grow in importance to its overall business.
All Vestech reps will use Altigo when allocating to alternatives—creating efficiencies in home office supervision and onboarding, while enabling reps to deliver a full range of investment solutions that align with their clients’ needs and goals.
“The home office is prioritizing automation of our core capabilities to scale up our services and provide a singular, centralized alts subscription process for both our new and existing reps,” said Vestech Chief Compliance Officer Marco Ramirez. “The quick, 30-day turnaround time from signing up with Altigo to our reps going live on the platform exceeded our expectations, and our reps are completing transactions in minutes. Straight-through processing has already lowered our operational burdens as Vestech reps have begun using Altigo.”
Vestech was motivated to work with Altigo on getting the home office and its reps set up on the platform. In choosing Altigo’s straight-through processing technology to power its alts program, Vestech joins a community of 300+ sponsors, broker-dealers, and RIAs that benefit from the platform’s smart workflow, speedy and accurate transaction processing, and paperless efficiencies.
Altigo integrates all aspects of alternative investment subscription and compliance, while significantly reducing not-in-good-order (NIGO) errors and other administrative headaches. The platform will help Vestech manage its alts paperwork and grant them access to all their firm-approved alternative investment offerings in a single, white-labeled portal. Altigo has also integrated with Redtail CRM to make pulling client data into the platform easy.
Altigo and WealthForge CEO Bill Robbins said, “Altigo’s mission is to reduce the friction traditionally associated with alternative investments and help firms like Vestech connect reps with a broad range of high-quality products and sponsors that can help investors reach their financial goals. We’re excited that Vestech reps can now help their clients more easily explore the potential of crucial alternative asset classes.”
About Vestech Securities
Headquartered in St. Louis, Missouri, Vestech offers full-service brokerage and corporate advisory services to help small and mid-sized businesses, registered representatives, investment advisors and their clients attain their financial goals. In doing so, Vestech has developed the infrastructure and dedicated staff needed to offer investment professionals an opportunity to grow their business. Vestech strives to make positive impacts in the lives of their investment professionals and the clients they serve. Vestech refines their edge with competitive products and solutions, a simplified investment process, a culture of integrity, and the best industry practices.
About Altigo
Altigo is the leading open network alts subscription technology used by a community of 300+ sponsors, broker-dealers, and RIA firms. The platform enables secure electronic alternative investment transactions between asset managers, wealth advisors, custodians, and transfer agents.
With over 10,000 alts subscriptions completed on the platform since its debut in mid-2019, Altigo’s adoption reflects the valuable benefits it provides to reps and advisors including diverse product offerings, nearly error-free paperwork, and lightning-fast order entry.
Altigo’s team of experienced professionals is committed to client experience, adding new features on a regular basis and helping its ever-expanding client base streamline investment workflows and eliminate reliance on outdated paper subscriptions and snail mail.
ADISA Publishes A Guide to DST 1031 Best Practices (2022)
November 30, 2022 | ADISA
ADISA, the nation’s largest trade association for the alternative and direct investment space, announced today the publication of A Guide to DST 1031 Best Practices (2022), a manual designed to highlight certain best practices related to Delaware statutory trusts (DSTs), which are the preferred structure used to facilitate securitized 1031 exchanges.
“1031 exchanges are increasingly popular tax-advantaged investments and are projected to raise more than $8 billion in investor equity in 2022,” said ADISA Executive Director John Harrison. “As more investment sponsors enter the 1031 market, ADISA sought to provide a set of best practices for these sponsors, as well as investors and advisors who are evaluating a possible offering. This guide was a collaborative effort between industry participants, including ADISA’s Standards, Education & Publications Committee, and volunteer members comprised of financial advisors, sponsors, attorneys and more. We are extremely proud of this publication and grateful to the volunteers for their efforts.”
ADISA first published its guide to certain tenant-in-common (TIC) best practices in 2006, when TICs were the dominant structure used in securitized 1031 exchange offerings. Since then, the guide has evolved with the needs of the industry. A Guide to DST 1031 Best Practices (2022) covers a variety of topics related to DSTs and 1031 exchanges, including the history and foundational principles; like-kind exchanges; private placement memorandums and disclosures; due diligence; DST securities practices; and general DST restrictions, benefits, and structures. The guide is intended for use by sponsors, broker-dealers, registered representatives, investment advisors, attorneys, CPAs, qualified intermediaries, other professional advisors, and investors.
The Alternative & Direct Investment Securities Association is the nation’s largest trade association representing the non‐traded alternative investment space. ADISA’s members are typically involved in non-traded real estate investment trusts, business development companies, master limited partnerships and private and public funds (LPs/LLCs), 1031 exchange programs (DSTs/TICs), energy and oil and gas interests, equipment leasing programs, or other alternative and direct investment offerings. The association was founded in 2003 and has approximately 5,000 members who are key decision makers, representing more than 220,000 professionals throughout the nation – including sponsor members who have raised in excess of $200 billion in equity and serve more than 1 million investors. ADISA is a 501(c)(6) non-profit organization, registered to lobby, and also has a related 501(c)(3) charitable non-profit (ADISA Foundation) assisting with scholarships and educational efforts.
Urban Catalyst Funds Joins the Alternative Investment Exchange (AIX) Platform
November 22, 2022 | Alternative Investment Exchange
Alternative Investment Exchange (AIX), the platform making it easy to buy, own, and sell alternative investments, welcomes Urban Catalyst Funds to the AIX platform. The team at Urban Catalyst Funds selected AIX to help make investing in its qualified opportunity zone (QOZ) funds easier than ever. The AIX technology platform will help Urban Catalyst Funds enhance their advisor experience, expand client relationships, attract new advisors to their offerings, and raise more capital.
After meeting with AIX, Urban Catalyst Funds was motivated to use the platform to automate its complex subscription process. Urban Catalyst Fund’s QOZ offerings provide investors with diversified real estate investments that enable them to defer capital gain taxes following the sale of an asset, such as stock, business, or property. Depending on when an investor joins a fund, complex calculations related to share allocations are conducted manually which causes extended delays. With AIX, calculations are automated and seamlessly captured in advisor-client subscription documents.
Unlike platforms that simply push digital documents between transaction stakeholders, the AIX technology platform facilitates the entire alternative investment lifecycle by digitally connecting all parties involved and seamlessly transmitting data through respective stakeholder systems. As such, AIX is uniquely able to help Urban Catalyst Funds reduce time spent managing documentation, minimize “Not In Good Order Trade” or NIGOs, and ultimately lower costs.
“At Urban Catalyst Funds, we’re committed to delivering an elevated experience for our advisors,” explained Pisoot Senethavilay, Director of Strategic Partnerships at Urban Catalyst Funds. “Our focus is to provide exceptional service to our partners and AIX supports these objectives by making the investment process straightforward and fluid.”
Another reason AIX was selected was for its commitment to data security encryption. AIX’s data security controls work to protect personal identifiable information transmitted between advisors and investors during the transaction lifecycle.
Urban Catalyst Funds is a leading real estate equity fund manager and development company. The company was founded in response to the 2017 Tax Cuts and Jobs Act legislation creating opportunity zones and opportunity funds. Urban Catalyst Funds ranks among the top 5% of all tracked opportunity zone (OZ) fund sponsors as measured by capital raised according to the research firm Novogradac, and has been named a top 10 OZ fund by Forbes.
“This technology integration is particularly exciting due to Urban Catalyst Fund’s commitment to the advisor experience and the team’s desire to elevate the way alternative investments are delivered and managed over time,” added Brad West, AIX COO. “We look forward to supporting Urban Catalyst Fund’s goals and helping the group bring the advantages of opportunity zone funds to more advisors and investors.”
About AIX:
Alternative Investment Exchange (AIX) is an end-to-end digital platform purpose-built to improve the processes related to buying, owning, and selling alternative investments. AIX’s technology reduces friction, mitigates risk, and creates value across all alternative investing stakeholder groups – wealth managers, asset managers, custodians, transfer agents, and fund administrators. By evolving beyond documents to make data the connective tissue between alternative investment players, AIX makes it easier to conduct business and accelerate industry growth. For more information, please visit aixplatform.com or LinkedIn: linkedin.com/company/aix-alternative-investment-exchange.
Media Contact:
Mark Tordik Broadpath for Alternative Investment Exchange (AIX) 215-644-6503 mtordik@broadpathpr.com
CAIS: Performance Dispersion in Alternative Asset Classes
November 18, 2022 | Andrew Snyder, Linge Sun, & Nicholas Reade | CAIS
When an advisor is deciding whether to include an alternative asset class in their client portfolios, they typically compare performance at an index level. Yet, when their process moves from portfolio construction to actual implementation, those same aggregate indices may not be readily accessible through an investable fund, like an S&P500 ETF for US Large Cap equities, for example.
Instead, financial advisors may decide to pursue an asset manager, strategy and/or fund to add the exposure they seek through their alternative asset allocation. That fund’s performance may potentially be markedly different than its index.1
To better understand the importance of selecting managers, we look at the difference in historical fund performance across alternative asset classes and through different market environments. We also investigated the extent that asset managers’ past performance might effectively guide advisors in their due diligence efforts. Given our findings, we believe that careful diligence of managers is critical when pursuing the risks and potential benefits of alternative assets.
As market volatility persists, alternative investments have been the subject of increased news coverage and surveys, with headlines ranging from surging alts demand by financial advisors to young and wealthy investors flocking to alternatives. For good reason. Alternative investments have historically provided portfolio diversification, been uncorrelated with the stock and bond markets and have helped hedge against inflation.
Financial advisors not yet using alternatives or those who haven’t explored alts recently are missing out – as are their clients. Alts can help increase portfolio returns and reduce risk. They can also help financial advisors differentiate their practices and offer greater value to clients.
Demand for Alternatives
While much of the recent focus on alternatives centers around the perspective of financial advisors, the more compelling information discusses the opinions of and demand for alternatives by investors themselves.
According to a recent Bank of America Private Bank study, younger, wealthy investors are looking beyond the stock market for higher returns.1
• Younger generations engaging in new investment strategies: 75% of investors between the ages of 21 and 42, compared to 32% of investors over age 43, do not think it’s possible to achieve above-average returns solely with traditional stocks and bonds.1
• 80% of young investors are looking to alternative investments, such as private equity, commodities, real estate, and other tangible assets. They allocate three times more of their investment portfolios to alternative strategies (16%) and half as much to stocks (25%) than older investors (5% and 55%, respectively).1
Additionally, according to a recent survey conducted by Cerulli Associates – a research firm that helps power financial services firms with in-depth analysis and strategic recommendations – and Blue Vault – the leading aggregator of alternative investment data and analysis – for advisors offering alts, 19% of the time, it’s due to client requests.
As an industry, this is what we’ve been waiting for – investors not only being open to exploring new investment strategies, but also recognizing the benefits of alternative investments and asking for them to be added to their portfolios.
Increasing Supply of Alts Investment Programs
According to Preqin – a privately held London-based investment data company that provides financial data and insight on the alternative assets market – the global market for alternative investments will be $18.3 trillion in 2027, up from $9.3 trillion and almost twice its size at the start of 2022.2 From 2015-2021, the alternative investment market grew 14.9% annually, and during the coming five years, Preqin expects it will grow 11.9% annually.2
The investment programs making up the alternative investment industry are diverse in both investment structure and focus. A wide range of investors can access alternative investments through structures with low investment minimums and less stringent eligibility requirements, like non-traded REITs, as well as through private placement fund structures that require a more significant investment and investors to be accredited.
The investment focus of alternatives is wide ranging, including the four “food groups” of commercial real estate (i.e., office, industrial, retail, multifamily) and beyond…far beyond to agriculture, hotels, solar farms, land entitlements, single-family rentals, private equity, private debt, hedge funds, commodities, collectibles and structured products.
Financial Advisors Key to Bridging Gap
The key to bridging the gap between the demand/need for alternative investments by investors and the many available alternative investment programs is financial advisors. According to the Cerulli Associates and Blue Vault survey, polled financial advisors reported their alternative investment allocations to be significantly higher in 2022 at an average of 14.5% (vs. 10.5% in 2021) with projections of an increase to 17.5% in two years.3
Financial advisor interest in increasing alts allocations is great news for investors – and the industry overall. But the bigger lever to expand investor access to alts is for more financial advisors to increase their knowledge level of alts so they are comfortable offering them to clients. Today, most agree that approximately 15%-20% of financial advisors offer illiquid alternatives to their clients, leaving a large opportunity for additional advisors and their clients to benefit from investing in alts.
In the Cerulli Associates and Blue Vault survey, advisors noted challenges in offering alternative investments to their clients, including high management fees/loads, complexity, and/or that their firms don’t support alternative investments.
Asset managers in the alternative investments industry, along with firms serving it – like tech providers – continue to address advisor challenges. Fees on many products have come down significantly in recent years, a number of products offer greater liquidity, and transparency has improved. And tech firms are constantly working to streamline and automate the paperwork process.
Now Is the Time to Look at Alts
Any advisor who hasn’t looked at alts lately, should revisit the wide range of programs available today. An easy way to do that is through Blue Vault.
Blue Vault is the leading aggregator of alternative investment data and analysis. They specialize in industry insights, trends, tools, and solutions. Think of them as the high-octane fuel behind connecting advisors with alternative asset managers and investment solutions. They keep wealth advisors informed and equip them to select the best alts strategies for their clients and their practice.
The Blue Vault annual Summit is being held March 6-8, 2023 in Atlanta. Plan now to attend to learn about alts for the first time or up your alts game if you’re already using them. Learn more about the Summit here.
About Marketing Intent
Marketing Intent is a sales-focused marketing group specializing in alternative investments. We live by the mantra “nothing happens until something is sold.” Our marketing serves as the backbone of sales. Our work makes your prospects and clients take notice, ask questions and listen to your story. Learn how we help asset managers create marketing that helps raise capital. Contact us.
Total Asset figures are from the last quarter reported for active programs and are the average total assets for full-cycle programs over their respective lives.
Equity capital raised during offering periods, including DRIP proceeds.
Full-Cycle (Date): Shareholders received cash or listed stock for all common shares of the previously non-traded investment program as of the given date.
In-Process: The investment program has commenced liquidation of its investment portfolio, has announced a merger or sale that has not yet been consummated, or has yet to provide common shareholders with full liquidity for their shares with cash and/or listed stock.
SRP/Tender: Share repurchase or tender program which permits shareholders to sell their shares back to the company, subject to limitations. The frequency, price, and limitations vary by investment program.
Suspended: The investment program has suspended its share repurchase or tender program.
None: The investment program does not have an intermittent liquidity program, but shareholders will receive liquidity upon termination or liquidity event at the end of the investment term.
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