ALL ABOUT ALTO
Find your entry point to alternative assets as an everyday investor
March 1, 2024
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When people realize they can use their retirement funds to invest in alternative assets, they encounter a new, different way to consider financial freedom.
According to Ryan Kirchner, Director of Sales and Investor Relations at Alto, the lightbulb moment for everyday investors happens when they discover that they can invest their retirement funds in alternative assets like startups and private deals.
While alternative investments are meant for highly sophisticated investors only, even within that group, Alto still sees a disconnect of the individual investors and their awareness of the opportunities that are actually already available to them.
“You do have different ways to diversify your assets. You have a choice to invest your money however you’d like. You’re not obligated to put your money into a 401k, or into the stock market, or into the bond market, or any other very traditional investments. You have the right to invest how you want.”
Ryan Kirchner
Director of Sales and Investor Relations at AltoIRA
To participate in alts, you don’t have to:
By diversifying your retirement portfolio with alts, you can potentially change the trajectory of your financial future. You just need capital and an entry point into the diverse array of assets considered alternative.
Here are five factors you may want to consider when evaluating potential providers that offer access to alternative investing
Be an institutional investor or fund manager
Have professional financial licenses
Be an accredited investor, qualified purchaser, or a qualified client
Have an ultra-high net worth
Be an executive of a company issuing securities
Have experience in private capital markets or alternative assets
Consumer education to help you make smarter deals
The provider you choose should be a team that educates everyday investors about alternative assets.
“Clients come in with an appetite for alternative investments because they understand the outsized gains that they potentially have,” says Ryan. “So the first thing that’s critically important for Alto to provide is consumer education.”
Alternative assets can include a range of unregistered securities like private equity, venture capital, individual startups, real assets like commercial real estate, fine wine, and fine art, and even cryptocurrency.
Once the exciting opportunities of investing in alternatives dawns on investors, they usually have a wide range of follow-up questions. And that’s what we’re here for.
Alto helps investors — novice and seasoned — understand:
The mechanics of investing in alternatives.
How the process can work and what one might expect.
The basics of various investment sectors and their administrative differences.
The execution of private credit deals looks different from venture capital deals, and those processes differ from real estate deals, and so on. Investors who know these basics can build on the knowledge to guide their own decision between deals.
Ways to access new opportunities for themselves.
An asset or fund manager that appeals to one investor may not interest another.
What’s changed to reduce barriers to access alternatives.
An ever-evolving regulatory and consumer financial landscape warrants exploration.
Alto’s commitment to educating users (and the market more broadly) centers on one idea: everyday investors can now access alternative investments.
Guardrails to facilitate self-guided deals
Investing in alternatives comes with a variety of legal considerations and lift.
That’s why our team has built protocols to de-stress and help safeguard the transaction experience.
We address risk by analyzing deals to determine which ones are legally transparent. We work with partners who maintain stellar reputations. We do our own diligence, so we can bring you opportunities that you can rest assured have met our high standards for compatibility with the long term time horizon of investing for retirement.
It’s important you don’t misunderstand any of our verifications as investment recommendations, but instead, informational context. From there, you can then decide if a deal is right for your portfolio.
A clear, repeatable process for sourcing, selecting, and facilitating investment deals
Alternative assets are often considered highly complex, which can create yet another barrier for people who want to deploy their retirement funds into private capital markets.
At Alto, we handle the cumbersome paperwork necessary for such intricate investment processes so that our users can focus on finding and assessing deals they find interesting. We achieve this by combining our aforementioned guardrails with a team of investment associates that liaise between capital allocators (that’s you) and financial institutions.
Traditionally, when it came time to close a deal, the actual movement of money was extremely difficult. For a long time, numerous institutions and parties have had to contribute various approvals and documentation on decisions to move along an investment in an alternative asset.
Through our collective experience in the sector, we know the way money movements transpire, as well as the people involved at various levels. With that knowledge, we help investors facilitate investments seamlessly. The result is an easy process that many Alto investors repeat again and again.
Partnerships with issuers who champion access for everyday investors
At Alto, we seek and work with issuers who share our vision. That means that the general partners and fund managers we partner with have a demonstrated belief in paving the way to accessible alternative investing for all.
Alto conducts the upfront due diligence to ensure that the leaders of the firms we work with are aligned on the operational values, meticulous attention to detail, integrity-driven business dealings, investment opportunities, and customer experience that our users expect.
Alto works with partners who believe that no matter your identity, social status, or account balance, you should be able to invest in alternatives alongside the greats. By partnering with Alto, issuers show their commitment to that end.
Will we ever be able to eliminate risk from alternative investments entirely?
No.
But, we are confident that the general partners we work with are driven by the same ethos of enhancing the accessibility of alternatives for everyday investors. That’s just another reason Alto stands out as a great entry point into alternative asset investing.
Lower capital commitment minimums for greater accessibility
In 2023, the average deal size for venture capital alone was over $13 million. Private equity deal sizes averaged roughly $964 million. It’s still rare to find an alternative asset deal that welcomes low commitments from investors. Issuers across various asset classes, industries, regions, and financing product group markets are incentivized to limit the number of investors. So, they’re motivated to pursue purchasers in positions to write bigger checks.
Alto is in pursuit of unifying retail investors behind a common goal: to grow value together and, ideally, to profit together. We took a major step toward that goal when we partnered with issuers who offer a variety of minimum dollar amounts required to participate in alternative investments.
Alto partners with issuers who provide a variety of financial entry points on their own terms. This range of minimums makes diversification (with alternatives) more accessible for the everyday investor. Use it to invest directly in a deal alongside other accredited investors as a fellow limited partner.
These 5 indicators can help you choose an alts investing partner and find your unique entry point into the ecosystem
If – like many people – you didn’t know that you could diversify your portfolio by contributing IRA funds to alternative assets, then you wouldn’t have even known that some entry points into the space are better suited to your needs than others. Until now, this uncertainty may have been a barrier.
But now that you know it’s possible to use your retirement funds to invest in alternative assets, look for an entry point provider that:
Creates educational material for investors
Puts guardrails around offerings to facilitate transparency and compliance
Standardizes procedures and processes to improve the investment experience
Creates educational material for investors
Puts guardrails around offerings to facilitate transparency and compliance
Prefer a shortened version with key takeaways? We’ve got you covered.
Want to learn more about Alto?
Check out the rest of this six-part series on Alto’s work and how we’re building towards alternatives for all.
