Longtime fintech pioneer Ryan Feit throws his weight behind ALTI’s push to democratize private equity.
Few people in the US have done as much as Ryan Feit for opening doors that were long bolted to investors looking to expand beyond the conventional stock and bond markets.
And presently, he’s lent his support to the team at ALTI as a Senior Advisor.
Feit initially made his mark in the startup space as he joined the group working in Washington, DC, to pass the Jumpstart Our Business Startups (JOBS) Act, which allowed startups to raise funds from individual investors over the internet, in 2012. Shortly thereafter, he co-founded SeedInvest, a leading startup investment platform.
SeedInvest, which was bought out in 2019, was highly selective in determining which startup investments it placed on its platform. Through its extensive due diligence, it allowed individuals to invest alongside some of the top venture capital firms in the country.
“ALTI actually has a very similar approach to SeedInvest, but in the private equity space,” said Feit, who spent the first part of his career in private equity roles. “I think private equity is one of the best asset classes out there and the top funds routinely outperform the public markets, but it really is largely reserved solely for the pensions and endowments that are writing very large checks.
“ALTI, however, gives individuals the ability to invest alongside some of the top private equity firms out there with much smaller minimums than you typically see in private equity.”
Feit shared other perspectives on investment opportunities with traditionally limited access (responses lightly edited).
You’ve spent much of your career working to open up markets that were previously restricted to institutions and the extremely wealthy. How do you see ALTI furthering that mission?
During my time at SeedInvest, there were a number of times that I thought about the opportunity to apply our SeedInvest model to private equity. Prior to graduate school, I worked in private equity and at that time, when I asked if some family members could invest in a fund, I was essentially laughed at and told they needed to write a $50 million check. Historically, it’s just not been accessible.
My journey with SeedInvest and the JOBS Act was all about democratizing investment opportunities that were traditionally reserved for just a select few people in America, but in venture capital. And I think ALTI really has an opportunity to do what SeedInvest did for venture capital and extend this to private equity. And that’s really key.
Stepping back, how did you first connect with ALTI CEO and co-founder Joseph Bonvouloir?
A friend of mine at Man Group, the $151 billion AUM group that currently partners with ALTI for liquidity services, asked me for my thoughts on this new firm. I told him I’d be happy to speak with Joseph and give him my thoughts, so he connected us.
Did you see similarities between ALTI and your previous efforts right away?
To be honest, I was pretty skeptical about the business going into that first meeting with Joseph because given my experience, I was well aware of some of the regulatory roadblocks they were going to face. Also, I knew there would be challenges to access top-level deal flow, which is essential in achieving returns on private equity investments.
But I was immediately attracted to what he was doing, due in part to the realization that he had already thought very deeply about these issues and he had a compelling strategy to attack them.
How did becoming an advisor to ALTI come about?
After my initial discussion with Joseph, I had a few follow-up due diligence questions, so we spoke a few times. At some point, I told him I would be open to being helpful in some way, given my background. One thing led to another and I ended up becoming an advisor to the company.
As you’ve observed the way Joseph has run the company, what has impressed you?
While I was at SeedInvest we probably had north of 100,000 companies apply to raise capital on the platform, so I’ve seen a lot of startups and I’ve met a lot of entrepreneurs. Oftentimes, younger first-time founders believe they’re smarter than everyone, they don’t need any help, and this pretty much always results in trouble for the founders down the line.
Right away, I could tell Joseph was the opposite of that. He wisely surrounded himself with very experienced people very early on. For example, he brought on Sheryl Schwartz, who previously managed billions of dollars in private equity for TIAA, and then he brought on Tom Selman, who oversaw regulatory policy and compliance at FINRA, as a temporary consultant/advisor during the regulatory process.
That’s probably the biggest thing that Joseph has done that a lot of first-time founders do not—he surrounded himself with the right people with the understanding that he likely has areas where he’s not as strong, but he can lean on people that have done it before.
And as for the firm itself, what do you see as the key to its potential success?
Other platforms that have tried to do something similar in the past have had a lemon issue and end up with only second-rate investment opportunities. This has typically occurred because the funds that attract smaller investors only gain access to mediocre deals because the best private equity firms just aren’t interested in sharing their deals with small investors when they can get $50 million checks from pensions and endowments.
I believe, however, that ALTI has solved this problem through a unique partnership with Performance Equity Partners and its overall model for accessing top-tier investment opportunities. Ultimately, unlike anybody I’ve seen in this space, ALTI is able to provide individual investors with co-investment opportunities in top deals alongside some of the most reputable private equity firms in the world.
To me, that’s where the secret sauce is and I think ALTI has built a better mousetrap than anybody else who’s tried to do this.
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