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The Real Estate Family Office and Private Wealth Management Forum (East) is organized annually by IMN, with the 2022 conference taking place in Miami, Florida.
AltsDb co-founder Andy Hagans joined Jimmy Atkinson during the event to discuss the incredible growth of the alts industry, and the story behind AltsDb.
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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.
Jimmy: Welcome to AltsDb. I’m Jimmy Atkinson. We’re coming to you live onsite at the IMN Family Office Real Estate Forum in Miami, Florida. I’m joined today by the co-founder of AltsDb, my good friend, Andy Hagans. Andy, how’re you doing today?
Andy: I’m doing great. Really enjoying the conference here.
Jimmy: Yeah, as am I. We’re official media partners this time around with IMN, so very pleased to be here, helping to cover the event and putting together some content around the event. But on today’s episode, Andy, I wanted to focus on who we are at AltsDb, the Alternative Investment Database, and “The Alternative Investment Podcast.” Can you tell us a little bit about what AltsDb is and our origin story for our listeners and viewers who may be unfamiliar with us?
Andy: Yeah, great question. Who is AltsDb? So, AltsDb is an independent media platform covering the alternatives industry, and our flagship media channel is our podcast, “The Alternative Investment Podcast”. And we are the largest podcast covering the alts industry that is targeted towards RIAs, family offices, and very high net worth, ultra high net worth accredited investors. And so that focus on family offices as part of our target audience, that’s why we’re here at this conference which is targeted towards family offices, obviously.
Origin story of AltsDb, Jimmy, in case our audience isn’t familiar with you and your property, Opportunity DB, covering the private equity side of real estate offerings in the opportunity zone space, well, we launched Alts DB to broaden out and cover all sorts of private equity funds, whether that’d be private equity real estate funds, and that is a big focus of ours, but also hedge funds, venture capital, oil and gas, a lot of tax-efficient strategies that, again, family offices are very interested in.
Now, you and I had worked together over a decade ago in financial media at ETF Database, so that’s kind of where we got our feet wet in the financial media space. Since that time, you and I, we’ve both been LPs and investors in other alternative investments. And at some point, you know, we thought, “You know, we really ought to cover this space from that perspective, the perspective of the LP.” So I think we’re also a little bit different from some other media in the alternatives industry. It’s almost totally B2B, totally focused towards industry insiders, which is okay.
I think we kind of bridge the gap where we cover that B2B side of the alts industry, but we also produce a lot of content that’s geared towards family offices, RIAs, accredited investors.
Jimmy: Yeah, that’s right, Andy. We started ETF DB covering the exchange-traded funds industry in about ’08, ’09 right when ETFs were taking off. I started Opportunity DB in 2018 right when opportunity zones were taking off. So we started AltsDb at the end of 2021. Is 2022 the year of alts, Andy, in your mind?
Andy: Well, talk about teeing me up for a softball, or maybe I should say right down the middle fastball. This has absolutely been the year of alts. Think about a year where equities, bonds are down 20%. They’re both in a bear market. I mean, total bloodbath in the bond market and alternatives as a whole have barely skipped a beat. And, you know, you’ve seen families, typical allocation to alts might be 20%, 25%, maybe even higher.
Institutionals have been at 25% or more allocation, a lot of them at least, for quite some time now. And now you’re seeing very high net worth, ultra high net worth self-directed investors, or even just kind of your everyday high net worth accredited investor make that larger allocation to alternatives. So we’ve seen a ton of inflows this year, and I mean, I should say it’s not necessarily an easy year for capital raising, right? So to see so much inflows into alternatives products this year and to see their performance be where it is, I think you’d have to say that this has been a banner year for alts.
Jimmy: Yeah, if you look at some of the reports that Robert A. Stinger and company come out with, or that Mountain Dell comes out with, DST volume is up, real estate transaction volume seems to be up across the board. A handful of other asset classes, opportunity zones, fundraising is up.
Andy: Don’t forget oil and gas. I mean, oil and gas has obviously been a great year for energy investors. So a lot of tax-advantaged investments in that space. It really is across the board with every single product. Now, I think going into next year, you didn’t ask me this, but I think going into next year, the momentum is going to continue for alternatives, but I do think it’ll be a little bit more dependent on asset class or on product wrapper.
I think if the past 12, 24, 36 months have been the rising tide that lifts all boats, I think that will still be somewhat true in the next 12 months, but I think we’ll see some particular asset classes and some particular wrappers or product types really outperform.
Jimmy: Well, can I put you on the spot and ask you which ones? Do you know which ones? Which ones are you bullish on for 2023? Let’s talk asset classes first and then product wrappers second.
Andy: Well, you know, one of my top asset classes right now would have to be energy, because I think you see some of the institutional players are shying away from oil and gas, not for financial reasons, not for risk mitigation reasons, but for purely political reasons or maybe you’d say ESG reasons. And so that definitely represents an opportunity, I think, for the private market, for family offices, for ultra high net worth, very high net worth accredited investors to kind of fill that gap, potentially get some outsized returns.
And particularly globally, domestically, we’re just not producing enough energy, and alternative energy is not going to close that gap anytime in the near future. So I think that’s an opportunity. And Jimmy, honestly, I know interest rates are up, I know they’re gonna climb higher, but with inflation where it is, historically in these environments of sustained high inflation, real assets will continue to outperform. But I think it’s sector by sector, it’s MSA by MSA.
So I think, you know, in the past, up until six, nine months ago, every MSA, every sector besides office obviously boomed, and I think now the market’s more discriminating where you’re seeing asset prices roll over in some markets, and then in other markets, we’re seeing some surprising resilience.
Jimmy: Well, what about, let’s tie back in family offices now because we’re at the Family Office Forum here in Miami. What is a typical asset allocation to alts for families?
Andy: Well, I’d say right in that 20%, 25%, 30% allocation to either real estate. You know, every family office might sort of phrase it differently, but either that sort of allocation to real estate or to illiquid alts might be typical. But, you know, they say if you know one family office, you know one family office. And so honestly, I think that allocation is gonna be very different for every family office. A lot of times, it depends on how the principal made his or her fortune. You know, they will often approach their family office portfolio in a similar manner based on what they’re familiar with.
I’ve talked to families that literally have a virtually 100% allocation to Alts talking about their long-term portfolio. So it’s really all over the map, but if you had to get an average figure to put me on the spot, I might say a 25%.
Jimmy: DJ Van Keuren was the keynote speaker this morning. We’re hoping to get him on the show a little bit later today. And he has his five main types of family offices. Hopefully, he can help run through those for you, Andy. But we’ll wrap up this episode for now. I’ve been Jimmy Atkinson joined by Andy Hagans, co-founders at AltsDb, and please be sure to subscribe to us on YouTube or your favorite podcast listening platform to always get the latest episodes. Just search for “The Alternative Investment Podcast” or AltsDb. Andy, it’s been a pleasure. Thanks for joining me today.
Andy: Thanks, Jimmy.