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.
Clip #1: What's the reasons why more people haven't put private markets investments in their self-directed IRAs?
Clip #2: How and when do investors start thinking about using a retirement account to invest in private markets?
Clip #3: Unlocking private market access to the wealth channel with a self-directed IRA.
Clip #4: Working with the financial advisor.
Show Notes
00:00 Welcome to the Alt Goes Mainstream Podcast
00:51 Diving into Private Markets with Eric Satz
01:22 Alto's Mission and Partnerships
01:33 Eric Satz's Entrepreneurial Journey
01:57 The Merits of Self-Directed IRAs
02:01 TurboTax for IRAs
02:05 Retirement Accounts and Private Market Investments
02:29 Welcoming Eric to the Podcast
02:37 The Evolution of Private Markets and IRAs
02:52 The Beginnings of Alto
03:14 Challenges in Self-Directed IRA Investing
05:12 Matching Long-Term Assets with Long-Term Savings
05:53 Growth of IRA Accounts
06:52 Private Market Investments in IRAs
07:53 Barriers to Private Market Investments
08:09 Psychological and Structural Challenges
09:22 The Role of Technology in IRA Investments
09:31 AngelList Partnership and User Experience
10:43 Investor Journey in Private Markets
11:24 Educating Investors and Advisors
14:03 The Evolution of Financial Advisors
15:03 The Importance of Illiquidity in Investments
18:30 Current Income and Tax Advantages
18:58 The Younger Generation and Volatile Investments
19:39 Compounding Returns in Private Markets
20:22 Asset Management and Diversification
21:36 The Role of Infrastructure Solutions
25:38 Alto's Marketplace and Crypto IRA
27:41 Friction in IRA Investments
29:49 Success of Alto's Technology
30:56 Partnerships with Major Asset Managers
31:43 The Growing Wealth Channel
32:41 Direct to Consumer vs. Intermediary Models
34:12 Educating Financial Advisors
34:42 Boots on the Ground Education
35:13 The Role of Financial Advisors in Private Markets
36:46 Unlocking Retirement Funds for Private Investments
37:45 The Role of Asset Managers in Education
39:05 Brokerages and Private Market Investments
41:06 Challenges in Asset Review
42:17 Future of Private Market Investments
43:12 Alto's Vision for the Future
44:46 The Role of Defined Contribution Plans
45:52 Legitimacy and Participation in Private Markets
46:13 Private Equity in Retirement Solutions
47:11 Diversification in Public vs. Private Markets
48:02 Borrowing Against Private Market Holdings
48:44 Regulatory Differences in 401k’s and IRAs
51:20 Common Sense in Investment Regulations
52:41 Exciting Future Investments
53:56 Conclusion and Final Thoughts
Editing and post-production work for this episode was provided by The Podcast Consultant.
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