NASHVILLE, Tenn., Aug. 29, 2019 (GLOBE NEWSWIRE) -- Alto, a technology platform that simplifies and streamlines the process for investors to add alternative assets to their IRAs, today completed a $5.4 million seed round led by Jefferson River Capital, the family office of Tony James, Executive Vice Chairman of Blackstone, and Moment Ventures, a Palo Alto-based venture capital firm.
Additional seed round investors included Foundation Capital, Sequoia’s Scout Fund, and Amplify.LA.
According to the Investment Company Institute (ICI), Americans have more than $28 trillion of assets in retirement accounts, including $9 trillion in IRAs. And, while Americans have always been allowed to invest in alternative assets with an IRA, only about one percent of IRA assets are invested that way due to the complexities in the paperwork and processes in setting them up and executing transactions.
“Since researching and co-authoring Rescuing Retirement, Tony has been focused on the retirement system in the US and concerned that more Americans than ever are approaching retirement with inadequate savings,” said David Wittels, President of Jefferson River Capital. “The existing 401(k) and IRA system requires Administrators to offer predominantly short-term, liquid investments, a structural bias that leads to subpar returns in comparison to pension funds and endowments invested in longer-term, less liquid alternatives.”
“Tony and I have been impressed with Alto’s mission to empower individuals to rethink the way they invest for retirement and the progress they’ve made to date. We are excited to help them grow even faster and make investing in alternative assets via Alto easy and accessible for anyone with a retirement savings account.”
Before Alto, investors interested in diversifying their IRAs with alternatives were faced with expensive manual processes and mountains of confusing paperwork. Alto’s streamlined system uses automated technology to distill the process to its simplest form, making it easier and much less expensive for both investors and those raising capital, also known as issuers.
“We’re thrilled to have Tony’s support and for Jefferson River and Moment Ventures to share our belief in democratizing alternative asset investing,” said Eric Satz, CEO of Alto. “They’ll play a vital role as we give more people the access and help they need to invest their retirement savings in alternative assets, like venture capital, crowdfunding and real estate.”
The Alternative IRA™ from Alto (an “AltoIRA”) is an individual retirement account that gives investors the freedom to invest in alternative assets like startups, private companies - including private equity and VC funds - real estate, marketplace loans, and digital currencies. In addition to direct company investments, Alto makes it simple and fast to invest on leading investment platforms like AngelList.
The reasons that more investors should consider alternatives in their IRAs are clear:
- The rise of index-based investing has made it difficult to achieve above-market returns.
- Decades of experience and market analysis demonstrate the value of adding sources of non-correlated returns to portfolios.
- Many fast-growth companies which would typically move to the public markets are remaining private longer due to a surplus of private capital.
- The potential for significant returns in alternatives are further enhanced by the tax advantages of IRAs, particularly Roth IRAs in which returns are not taxed at all.
- By definition, IRAs are long-term investment accounts, and this fits the liquidity characteristics of most alternatives, such as startups, real estate, and lending.
About Alto
Alto gives individual investors the ability to access and execute investments in alternative assets, such as private companies - including private equity and VC funds - real estate, and marketplace loans, using their retirement savings. The firm’s cost-effective and hassle-free technology platform streamlines the process for companies, funds, borrowers, and investment platform partners to include IRA investors in their offerings. Alto’s current investment platform partners include: AngelList, Carofin, EquityZen, Forge Global, Groundfloor, MasterWorks, Republic, Silicon Prairie, and Wefunder. Launched in 2018, the Nashville-based firm provides investors with an opportunity to achieve true asset diversification in their portfolios while maintaining tax advantages in their retirement savings. For more information, please visit www.altoira.com or follow us on LinkedIn and Twitter.