Alto's Eric Satz - retirement assets: the next frontier for private markets?
Alt Goes Mainstream: The Latest on Alternative Investments, WealthTech, & Private Markets
Simplifying IRA Investments: Overcoming Historical Friction
This chapter discusses the evolution of investing through IRA accounts, focusing on historical challenges faced by investors during asset transitions from 401k plans. It emphasizes the need for reducing friction through standardized and digitized workflows to facilitate easier investing.
Welcome back to the Alt Goes Mainstream podcast.
Today’s episode dives into an important and growing part of the private markets ecosystem: how investors can access and invest into alternatives through their retirement funds.
We have Eric Satz, the Founder & CEO of Alto, a self-directed IRA custodian, with us today to discuss how he’s on a mission to provide everyday Americans with the same investment opportunity long favored by institutional investors.
Alto provides custody for a wide array of alternative assets, including private companies, real estate, crypto, loans, and securitized collectibles.
Alto has streamlined the process for companies, funds, and SEC-registered investment platforms to include IRA investors in their offerings. They’ve partnered with firms across the alts space, including AngelList, Coinbase, EquityZen, Republic, Masterworks, and others, to enable investors to invest into private markets with their IRA.
Eric is a serial entrepreneur and former investment banker. He worked at DLJ / Credit Suisse First Boston before co-founding Currenex (acquired by State Street for $564M), Plumgood Food, and Tennessee Community Ventures. His passion for entrepreneurship led him to serve on the Board of the Tennessee Valley Authority from 2015 to 2018 and he teaches an entrepreneurship class to high school students.
On today’s podcast, Eric teaches us all about the merits of a self-directed IRA. We had a fascinating discussion about why and how it makes sense to use an IRA to invest into private markets investments and how he’s taking lessons learned from prior IRA businesses to build Alto.
We discussed:
- Rethinking retirement investing.
- The evolution of the self-directed IRA market.
- Alto’s vision: TurboTax for IRAs.
- Structural challenges with using IRAs for private markets investments.
- The role of technology with streamlining retirement investing.
- The evolution in investor awareness of retirement investing.
- The importance of duration matching.
Thanks Eric for coming on the show to share your knowledge and passion for alternatives.
Show Notes
00:00 Introduction: Going Mainstream
00:38 Welcome to Alt Goes Mainstream Podcast
00:52 Introducing Eric Satz and Alto
01:33 Eric's Background and Entrepreneurial Journey
01:57 The Mission of Alto
02:01 The TurboTax for IRAs
02:05 The Importance of Retirement Accounts in Private Markets
02:29 Welcoming Eric to the Podcast
02:37 The Evolution of Private Markets and IRAs
02:51 The Beginnings of Alto
03:13 Challenges in Self-Directed IRAs
03:54 The Vision for Self-Directed IRAs
04:28 Changing Conventional Wisdom on Retirement Investing
05:40 The Demographics of the IRA Industry
06:21 The Growth of IRA Accounts
06:38 The Allocation to Alternative Assets
07:36 Barriers to Private Market Investments in IRAs
07:50 Psychological Barriers to Alternative Investments
08:35 Structural Challenges in Using IRAs for Private Investments
08:53 The Role of Technology in Streamlining Investments
09:02 The Launch of Alto with AngelList
10:05 The User Journey in Private Market Investments
10:43 The Role of Financial Advisors
11:10 Educating Investors on Private Markets
12:25 The Evolution of Investor Knowledge
12:35 The Importance of Tax-Advantaged Investments
13:11 The Financial Advisor's Perspective
14:05 The Benefits of Illiquidity in Private Markets
15:54 The Role of Large Asset Managers
16:17 The Branding of Private Markets
16:45 The Growth of Athene and Financial Advisors
16:57 The Importance of Current Income in Retirement Accounts
17:43 The Younger Generation's Investment Behavior
18:05 The Impact of Evergreen Fund Structures
19:04 The Role of Asset Management Firms
20:02 The Future of Private Market Solutions
20:15 The Role of Alto in Private Market Investments
20:54 The Importance of Infrastructure in Private Markets
21:44 The Evolution of Alto's Business Model
21:50 The Growing Awareness of Private Markets
23:57 The Role of the Alto Marketplace
24:35 The Inclusion of Crypto in IRAs
25:17 The Challenges of Transitioning Assets to IRAs
25:50 The Impact of Friction on Investment Decisions
27:46 The Success of Alto's Technology
28:35 The Role of Funds in Promoting IRAs
29:36 The Future of Private Markets and Wealth Channels
31:11 The Role of Financial Advisors in Private Markets
31:58 Educating Financial Advisors on IRAs
32:13 The Importance of Conferences and Networking
47:13 The Future of Private Markets and Retirement Accounts
47:32 The Role of Regulations in Private Market Investments
50:27 Conclusion: The Potential of Retirement Accounts in Private Markets
Editing and post-production work for this episode was provided by The Podcast Consultant.
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