One comma has been removed from the elite club of family offices. Individuals may invest with Equi in complicated strategies centered on alternative assets for about $350,000, or little over five times the typical U.S. household income, according to the business, which is customary among billionaires trying to build their fortune. These billionaires and ultra-high-net-worth people frequently engage with family offices to manage their portfolios. Millionaires may now invest in these ideas as well, thanks to Equi. Furthermore, they may do so without having to invest $70 million in the beginning, which the business claims is often required to access such tactics.
Alternative assets have traditionally generated larger returns than stocks and bonds, which appeals to certain investors. Hedge funds, private equity, private real estate, and venture capital are among the options available through Equi’s flagship investment vehicle. The Equi flagship fund was created little over a year ago and has a 17-23 percent annual target return. In comparison, the S&P 500 has returned 10.5 percent annually on average during its existence, albeit it remains to be seen whether Equi can maintain these strong returns over a long time horizon.
To invest with Equi, you must first become an accredited investor, which requires a minimum yearly income of $200,000 for individuals and $300,000 for married couples. Approximately one out of every ten American families fits this description. Equi aims to expand its product offerings to include registered public funds that can take on tens of thousands of investors at substantially lower minimums, regardless of whether or not they are accredited, in the future.
Tory Reiss, co-founder and CEO of Equi, said in an interview with TechCrunch that he spent years as a financial literacy trainer while working in various IT professions. Through his efforts, he was able to have sensitive talks about money with a wide spectrum of individuals, and he discovered that the vast majority of them were investing in typical stock and bond portfolios through mutual funds, if they were investing at all. “The old investing advice of just dollar-cost averaging into Vanguard funds and expecting everything would be fine,” Reiss said, “was correct, and that was good advice for, let’s say, the last 40 years that we’ve been in this dropping interest-rate environment.”
“But then, once I had enough money to invest and could afford to look at multiple asset classes,” he added, “I started really researching real estate and private credit.” Reiss began investing in some of these alternatives after reading ex-Yale endowment chairman David Swensen’s seminal book, “Pioneering Portfolio Management,” with the purpose of increasing the diversification of his portfolio. Reiss added that after he started experimenting with these tactics, he no longer felt comfortable advocating for standard investing advice to others when he wasn’t following it himself.
In 2017, Reiss co-founded consumer debt refinancing platform Harvest Money, which launched his fintech career. According to Reiss, the firm secured startup cash from investors but shut down shortly after owing to disagreements with his co-founder. TrustToken, Reiss’s next initiative, was a huge success. Last August, the stablecoin startup, which Reiss co-founded in 2018, secured $30 million in capital from investors including Andreessen Horowitz, and is still scaling its network. Still, Reiss couldn’t get the concept for Equi out of his brain, so he started researching it as a research project before committing to it full-time in early 2020.
According to Equi, the minimum investment is now $350,000, down from $1 million when it initially began. Titan, Allocate, and YieldStreet, to mention a few, are among the businesses that provide institutional-style investing techniques to a larger population of investors. Titan attempts to emulate hedge fund investments in public shares, whereas Allocate concentrates on venture capital and YieldStreet is best known for its private loan products, according to Reiss.
Equi offers a far greater range of asset classes in one location, and it aims to collaborate with other platforms, like as Allocate, to offer their funds on Equi in the future, according to Reiss. Reiss thinks Equi will act as a one-stop shop for private deals, rather than requiring consumers to join up for various investing platforms for each asset type. Equi is able to acquire access to private fund allocations because it “systematically targets relatively unexplored strategies” rather than focusing on large, well-known fund managers, he explained. According to the business, these managers frequently operate specialist strategies, such as investing in life insurance settlements or trading carbon credits.