LFP241 – A Deep Dive Into Alternate Asset Investment via Fintech w/Dan Harman CEO Darksquare

London Fintech Podcast

Why buy alternative assets? Well in extremis what else would you buy? Bonds have finished their ca. 40yr bull market and yield well below the rate of inflation. The FTSE to pick one has gone sideways over the past 5 yrs and is not greatly ahead after a decade. And as for UK property it’s soft at best, Gold is going nowhere and so forth.

Naturally as we have touched on both those phenomena are a function of the nature of money, the ’08 crisis, covid insanity, non-stop war and much more which have all messed with the fiscal and monetary base of major western economies.

Anyway even if you keep a core of say equities in your portfolio there must be something more interesting to buy. Besides the self-styled “elites” are busy hoovering up alt. assets bigtime which tells you a thing or two.

Dan has an investment banking alt. asset background and so, as well as founding Darksquare, is well placed to dive into the topic with us.

Topics discussed include:

• holidaying in Paros
• Dan’s trading background in various categories of alt. assets
• the original motivation for founding an alt. asset platform
• what are conventional assets and what are alternative?
• what is the history of these concepts?
• much more recent than one might imagine
• examples of current alternative assets that individuals might wish to invest in
• diversifying portfolios is a very recent concept from the 19thC only prior to which folks would concentrate their assets albeit across many categories for the well-off
• regulatory angles on who is allowed (!) to invest via such platforms
• sizes of investments, sizes of deals
• yield-focus – eg 12-15% yield per annum
• the three most popular alt asset categories based on Darksquare’s survey
• the whole issue of knowing enough to sensibly invest in different asset categories
• listing hedge funds that invest in individual assets as a diversification within asset type diversification
• the sweet spot between institutional sized deals and not too small for them to exist as there area where these is way less competition and hence more investment opportunities
• liquidity – period of investments and whether one can sell during the period of investment
• how alt assets are financialised ie turned into tradable investments via SPVs – implications
• target durations
• aligning interests between platform and invest6ors by taking fees as slices of the investments not cash
• secondary markets and the implication of being a dealer and owning investments as a platform
• Dan’s view on the big picture of this sector going forwards and the opportunities/challenges
• vintage ferraris, watches et al – the field is unlimited as in essence it amounts to all assets less a very narrow set of ~ equities, bonds…
• cf hedge funds and institutional investors who are way ahead in diversifying out of the narrow oldskool list of financial assets
• Darksquare’s current footprint and plans for the future

And much much more

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