Live At IPAVision 2022: Jimmy Atkinson Of AltsDb

IPAVision is organized annually by the Institute for Portfolio Alternatives, with the 2022 conference taking place in Nashville, Tennessee.

AltsDb co-founder Jimmy Atkinson joins Scott Hawksworth with live reporting from this exciting event.

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IPAVision 2022 (IPA.com)

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About The Alternative Investment Podcast

The Alternative Investment Podcast is a leading voice in the alternatives industry, covering private equity, venture capital, and real estate. Host Andy Hagans interviews asset managers, family offices, and industry thought leaders, as they discuss the most effective strategies to grow generational wealth.

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Show Transcript

Scott: Hello, and welcome to “The Alternative Investment Podcast.” I’m Scott Hawksworth filling in for Andy Hagans. I am the director of business development at the Alternative Investment Database. And today, we are coming to you live from IPAVision 2022 in downtown, sunny Nashville, Tennessee, from the Grand Hyatt here.

And I’m joined by Jimmy Atkinson, co-founder of AltsDb. Jimmy, how you doing?

Jimmy: Scott, I’m doing great, man. This is fun here. This is our first IPA. We’re thrilled to be here and couldn’t think of a better place to spend my first IPA. Downtown Nashville’s great. We’re having a great time here, Scott, so let’s kick it off.

Scott: Yeah, let’s kick it off. I mean, how has the conference been going for you so far? You know, what kind of great conversations are you having? Who are you meeting? What’s going on?

Jimmy: Yeah. Well, first, I think this conference is coming at a unique point in IPA’s history. They just appointed a new CEO, Anya Coverman, which we were fortunate enough to have on our podcast at AltsDb just a few weeks back. Andy interviewed her before she got the CEO gig, but she’s the new CEO. And she said something really interesting in her opening remarks last night, and that was that “What’s needed in this industry right now is more storytelling and more education,” and that’s really why AltsDb exists.

It’s here to serve those two points. The entire mission and vision of AltsDb is really in line with IPA in that we’re trying to drive more stories about the investment products that are out there. But also, more education about what’s out there, what alternative investments are, how they fit into an investor’s portfolio, how wealth managers and other RIAs should be thinking about them.

Scott: Absolutely. And, you know, kind of pursuant to that, the storytelling, you know, getting that information about alts out there, what are maybe some of the topics, the alts topics, specifically, that are getting a lot of buzz or attention right now at this conference that you’ve seen?

Jimmy: Yeah. Well, I think, high level, first and foremost, is just the growth of alts. Like alts have received a tremendous amount of growth on both the supply side and on the demand side, so investors are demanding it much more. Wealth managers are demanding more alts much more. You know, the 60/40 portfolio is, kind of…

If it’s not dead, it’s at least, kind of, endangered, I would say.

Scott: Sure. It’s aging.

Jimmy: There was talk of that last night, Scott, that, you know, more wealth managers are, kind of, shifting away from 60/40 and instead, they’re thinking of 50/30/20, 50 stocks, 30 bonds, and then 20 alts. And then, within that 20, you know, there’s a lot of different products that you can layer in in to get a pretty good diversification into non-correlated, illiquid assets like alternative investments.

A lot of real estate, some energy contracts, BDCs, a lot of different flavors under the sun. I’m just, kind of, taking a look at my notes here, Scott, make sure I don’t miss anything. But also, more sponsors are entering this space. There’s just been a huge growth in the number of sponsors. This room behind us is getting bigger and bigger every year, and we’re looking forward to seeing how AltsDb can play a part in the growth of this industry.

Scott:Absolutely. And there’s also been… And we were at a panel last night where there’s a lot of talk about the, sort of, macroeconomic environment, a lot of economic uncertainty. I’m curious. You know, what are some of the takeaways or some insights that you’ve heard that really resonated with you when we’re talking macro?

Jimmy: Yeah. Well, a very timely question, Scott, because I think… actually, literally, just minutes ago, the Fed just raised the interest rates by another 75 basis points.

Scott: Okay, so 75 bps. There was discussion on what it was going to be, so 75, okay.

Jimmy: Yeah. The discussion last night centered around “What should the Fed do and what will they likely do?” And then, the consensus among the panelists up on the stage seemed to be, “Boy, we’ve already increased interest rates by quite a bit. Another 75-point jump might be a little bit aggressive.” They were hoping for a 25 to 50.

Well, that seemed to be the consensus last night on the panel, but they all expected 75. And sure enough, just moments ago, we did get 75.

Scott: Spot on.

Jimmy: Yeah. So, one point that was made that was really interesting that I hadn’t considered before was that inflation is at 8.3% now, I think…

Scott: Yeah, about there.

Jimmy: …which is really high. Housing is a significant component of that inflation, and housing costs have inflated so much over the last year, especially, but really, over the last 10, 20 plus years in part because we are terribly, woefully undersupplied in this country with housing stock. And while increasing rates may tamp down inflation in certain sectors of the economy, what it’s going to do to real estate is it’s actually going to tamp down supply.

It makes it harder to supply more housing stock when interest rates go up. So I thought that was an interesting point that was brought up last night.

Scott: Right, and what that, in turn, will do to rent and those increases there and the pressure being put on rents. You know, that’s just another factor, right?

Jimmy: Absolutely, Scott. You know, another point, just to, kind of, shift gears a little bit… We talk a lot, at AltsDb, about 1031 products, and the Delaware Statutory Trust has gotten a lot of attention the last 5 to 10 years, in particular, DST market, And the DST marketplace is really growing quite tremendously.

And it’s a good thing that 1031s… They were on the chopping block for a little bit last year. We thought that they might get severely impacted in a negative way by an act of Congress, and fortunately, that legislation got tweaked, didn’t go through, that would’ve really hurt the 1031 and the DST industry.

And, you know, one point that was made earlier today at one of the panels this morning was DST products, they couldn’t put enough DST supply… The sponsors could not put enough DST supply on the marketplace the first half of this year. And now, the last few months, that’s, kind of, turned on its head to the point where DSTs were flying off the shelf, you know, 20- to 30-day open period, basically.

You couldn’t get in if you waited too long. And now, we’ve got enough supply on the market that they tend to stay open for 60, 90, 120 days, so I think that’s a little bit of maturity of the market. That’s what we’re seeing right now, at least in the DST space.

Scott: Hundred percent. Any other closing thoughts or takeaways? You know, it’s day two, so we’ve got one more day here at IPA. Any other thoughts?

Jimmy: Well, just really excited to meet, in person, a lot of the folks that we’ve been interacting with via email and on the phone and on Zoom over the past several weeks and months. You know, we’ve seen folks from iCapital, from Griffin Capital, from Case, Capital Square, Cantor Fitzgerald. I’m sure I’m missing quite a few here. Oh, Stanger, Kevin Gannon was here from Stanger.

It was great to just interact with all of these really heavyweight thought leaders in this space and pleased to be moving forward with AltsDb. And we’re happy, at AltsDb, that we’re a new member here at IPA, and I think we’re having a pretty successful run here at IPA despite not being here with our co-host. Andy wasn’t able to make it, but I think he’s going to come to the next one next year.

We’ll hope to get him out here.

Scott: I think so. And, you know, I just add that it’s great to… You know, you email, you have those Zooms, but there’s nothing quite like, you know, standing there and shaking a hand and having those organic conversations, which is what a conference like this is all about.

Jimmy: Absolutely right, Scott.

Scott: Awesome. Well, thank you, Jimmy, and looking forward to the rest of IPA here, 2022.

Jimmy: I am as well, and please be sure to subscribe to us on YouTube or your favorite podcast listening app. Just search for “The Alternative Investment Podcast.” Thanks so much.

Scott: Thanks.