AltExchange, a New York-based data and technology company focused on alternative investments, today launched its AdvisorVue platform, which the company says is designed to improve advisor clarity when it comes to an asset class that is growing even among mass-affluent investors.
“When we look at the interest in alternatives among individual investors, more than 80% of ultra-high-net-worth investors have alternative holdings, and we expect that,” said Zac Boca, AltExchange CEO and founder, citing a Cerulli Associates survey that also found 29% of high-net-worth client hold alternatives. “But client portfolios at smaller net worths are getting more complicated. We’re also now seeing the mass affluent increasingly interested.”
And if alternative investments perform well for investors under current market conditions that include volatile public equities and high inflation, Boca said that increasing demand could end up being a challenge for financial planners tasked with seeing the big picture for more clients than they used to.
“Advisors can’t make good recommendations regarding an overall portfolio unless they can track performance and compare investments across the board,” Boca said. “Let’s say a client has $3 million in a private equity fund. Historically, adding in private equity investments was a very manual process.”
For that kind of client, an advisor has to stay on top of capital calls and collect K1s and other tax documents, he said, making sure they address portfolio management, performance reporting and accounting requirements. The ultra-wealthy typically do this with a family office managing a spreadsheet, he continued, adding he also had to do it when investing 65% of his portfolio in 35 private equity funds. That sub-par experience was what inspired his vision for the AltExchange data platform, he said.
“Because the space is so fragmented and there is no standard in how asset managers report performance to an LP, I was using an outdated spreadsheet to try to understand performance,” he said. “And advisors couldn’t help. I went through several. So that’s what we’ve automated. And we’re giving advisors a platform to manage those capital calls, collect the tax documents and provide a list of transactions.”
AltExchange’s technology syncs nightly with the 40 largest fund administrators and other data providers like iCapital and extracts data to show as close to real-time performance as possible for all private market investments—including private equity, hedge funds, real estate and startups—and then turns that data into structured, standardized reports. (The definition of real-time in alternatives is monthly or quarterly, depending on when distributions are made or account statements issued.)
Once logged onto the AdvisorVue dashboard, an advisor can see a quick-view card for each client that shows the number of upcoming capital calls, total number of alternative investments and total assets under management. Advisors can then click down further into individual investments to see performance, multiple, percent of total capital called to date and all documents.
“Our business is to have a place for investors and advisors to see the entire alternatives account, everything outside brokerage,” Boca said. “Above all, the data has to be helpful. Advisors have to know that for a particular client they need to have a certain amount in short-term liquidity investment so they can meet upcoming capital calls.”
In addition to AltExchange’s sources, if an advisor uses a client portal to view any other fund investment, it’s easy to add that data to what’s in AdvisorVue, Boca said, simply by sending AltExchange the data. The company’s machine learning models sort through it and extract the important details, no matter what the format, he said.