AGM Alts Weekly | 5.14.23
AGM Alts Weekly | 5.14.23
AGM Alts Weekly #1: Making private markets more public, every week.
👋 Hi, I’m Michael and welcome to my weekly newsletter, the AGM Alts Weekly. Every Sunday, I cover news, trends, and insights on the continuing evolution and innovation in private markets. The Alts Weekly features the AGM Index of publicly traded alternative asset managers.
Join us to understand what’s going on in alts so you and your firm can stay up to date on the latest trends and navigate this rapidly changing landscape.
Welcome
Welcome to the first edition of the AGM Weekly Newsletter. We’ll be sharing relevant news articles, an Index of publicly traded alternative asset managers, and recent podcasts and thought pieces from Alt Goes Mainstream.
AGM Index
AGM has created an Index to track the leading publicly traded alternative asset managers.
Some of the industry’s largest alternative asset managers are publicly traded — and their net inflows can serve as a window into how private markets are being perceived by investors and allocators who are allocating capital into alternative investments.
AGM News of the Week
Articles we are reading
📝 Tech opens the door for democratisation | Claire Coe Smith, Private Equity International
💡Platforms that aggregate access to private equity are taking root in the private markets. Technologies such as APIs, blockchain, tokenization and Web3 are being explored, and in some cases leveraged (see: Hamilton Lane and KKR) to bring transparency to the asset class and streamline onboarding. Many PE funds, however, are uninterested in being distributed on a marketplace or platform because high re-up rates from existing investors don’t necessitate opening their books, history and track record to a large user base. A supportive regulatory environment and acceptance from institutional investors are building blocks necessary for democratization.
📝 Hamilton Lane Offers Polygon-Based Tokenized Access to a Second Fund | Brandy Betz, CoinDesk
💡Hamilton Lane, an investment management firm with $824B AUM, is offering tokenized access to a second fund. Access is granted through a feeder fund from Securitize on the Polygon blockchain. Tokenization is a growing field that claims to widen access to traditional finance products by making private market investments available to investors who don't fall into the institutional or ultra-high-net worth net bracket.
📝 Private Credit’s ‘Lost Decade’ Is Ending. Here’s What Comes Next | Alicia McElhaney, Institutional Investor
💡The private credit market is attracting more capital as investors seek short-duration, structured and distressed vehicles while maintaining strong governance provisions. Private credit has experienced a “lost decade” with tight spreads, tight money and low yields. Investors are increasingly targeting higher credit ratings and better positions in capital structures.
Reports we are reading
📝 Data-driven VC Landscape 2023 Report | Dr. Andre Retterath, Earlybird VC and Data-driven VC
💡 Dr. Andre Retterath of Earlybird VC has a great content platform, Data-driven VC, which covers how the VC industry is undergoing a transformation driven by data. Andre’s report, which was put together in collaboration with some of the VC and alts core infrastructure providers like Carta / Vauban, Vestberry, Affinity, and Synaptic, highlights how VCs are leveraging data and AI to become more automated, efficient, effective, and comprehensive in their finding and picking of companies. Shoutout to Eric Kim, Chi-Hua Chien and the team at Goodwater Capital, the now multi-billion dollar consumer tech VC where I’m a Venture Partner, which has been a pioneer in the data-driven venture capital and leveraging data science to make investment decisions since they were founded in 2014 as a ~$131M fund and was highlighted in the report.
📝 Goldman Sachs Family Office Investment Insights Report | Sara Naison-Tarajano, Eliana Michaels, Goldman Sachs
💡 Some takeaways from Goldman Sachs’ second global survey of 166 family offices, 72% of whom are $1B+ AUM:
Family offices continue to hold outside allocations to alternatives. Private equity, private real estate and infrastructure, hedge funds, and private credit account for 44% of holdings.
Many family offices are expecting to increase their holdings in private equity, private credit, and private real estate and infrastructure.
Fixed income is back in. Almost 40% of family offices plan to increase their holdings in fixed income over the next 12 months.
Cash is … not king? Cash and cash-equivalent holdings, currently 12% of family office portfolios, is expected to fall this year as 35% of respondents are expecting to deploy capital this year.
📝 Practically applying tokenisation to asset management | Calastone
💡 From the report: “Tokenisation in asset management is no longer a future trend but a fast-emerging reality. Analysis by Boston Consulting Group has forecast that, even in a ‘highly conservative’ scenario, $16tn of assets will be tokenised by 2030 – an aggregate 10% of global GDP." Tokenization is a topic that’s being discussed often in the asset management world. Tokenization has the ability to be a transformative innovation for asset management, driving efficiencies, lowering costs for fund administration, and unlocking investor access. This trend underpins our thesis for the recent investment we made into Brassica at Broadhaven Ventures.
Interviews we are watching
🎙 Apollo’s Drescher on retail market push, diversification | Bloomberg
💡Apollo Global Management recently announced that it will release a group of funds designed for individual investors. Client and Product Development Officer Stephanie Drescher sat down for an interview with Bloomberg at the Milken Global Conference to discuss this big shift for Apollo and some of the reasons why this strategy was taken. Drescher believes that the rise of the individual investor could not come at a better time, as it can offer much needed diversification for risk management and opportunities to take advantage of the current volatile market conditions for shrewd investors. Furthermore, Drescher and the leadership at Apollo believe that education on private markets has improved significantly, which will help ensure that most individual investors will have access to information that will help them invest in alternatives in a safer and more effective manner.
The latest on Alt Goes Mainstream
Recent episodes and blog posts on Alt Goes Mainstream:
🎙 Hear Chris Ailman, the CIO of $307B CalSTRS, discuss how he manages a portfolio with ~40% exposure to private markets. Listen here.
🎙 Hear 44th Vice President of the United States and Chairman of Cerberus Global Investments Dan Quayle share his insights on geopolitics and investing. Listen here.
🎙 Hear Mark Anson, the CIO of $28B Commonfund, discuss why he thinks size discipline and sector focus lead to outperformance in VC. Listen here.
🎙 Hear Filip Dames, Founding Partner at leading European Seed VC Cherry Ventures, share why he’s so excited about the European venture ecosystem right now. Listen here.
🎙 Hear Sheel Mohnot, Founding Partner of Better Tomorrow Ventures, discuss the challenges and highlights of going from a first-time fund manager to a first-call FinTech VC. Listen here.
🎙 Hear Graham Elton, Partner & Chairman of EMEA Private Equity at Bain & Company discuss how the $3.7 trillion in dry powder in private equity will get put to work. Listen here.
📝 Read why now is a great time to be a founder or VC in Europe in a post that I wrote on “The Continued Rise of European Venture.” Read here.
📝 Read why fund managers are founders too and how LPs can help fund managers just as VCs help founders. Tune into a live event on Thursday May 18 in collaboration with EUVC. Read here.
Thank you for reading. If you like the Alts Weekly, please share it with your friends, colleagues, and anyone interested in private markets.
Subscribe below and follow me on LinkedIn or Twitter (@michaelsidgmore) to stay up to date on all things private markets.
If you have any suggestions, would like me to feature an article, research, or would like to recommend a guest or topic for the Alt Goes Mainstream podcast, reach out! I’d love to include it in my next post or on a future podcast.
Special thanks to Jack Knibb and Riley Robinette for their contributions to the newsletter.
No EQT ?