Altvest: Rethinking the way people invest

Joining the BizNews Power Hour are the directors of Altvest, an exciting company that aims to transform the way people invest in companies. Warren Wheatley, Koshiek Karan and Rob Hersov spoke to Alec Hogg about the project, with Wheatley noting that the idea comes from a desire to make incredible investment opportunities available to the ordinary public. “Finally we can offer these [investment opportunities] in bite-sized chunks, to everybody. A call-centre agent can buy a stake in a wine farm, solar plant, Ferrari or even an Arabian stallion.” – Jarryd Neves

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Warren Wheatley on the inspiration behind Altvest:

It’s always been a dream of mine. Ever since spending time advising ultra-high net worth family offices, when I saw the amount of deals that hit their desks – and the connections and opportunities – I had a burning desire to make those opportunities available to the ordinary public. It’s a travesty that it’s taken us this long to get there. But it needed a combination of tech, some savvy and just the movements in capital markets to get this right.

Finally, we can offer these in a fractionalised way – in bite-sized chunks to everybody. Suddenly a call centre agent can buy a stake in a wine farm, solar plant, a Ferrari or an Arabian stallion. We finally have all the tools that can bring these things together to make equal access to all investment opportunities, almost whenever they present themselves in the world. Eventually, we will be offering assets across the world to ordinary people in South Africa.

Rob Hersov on how Altvest democratises investing:

Altvest is a great way for the man or lady on the street to be able to invest. I recently had a chat with a friend who said that his dad basically taught him to get a job and invest in property – that was his investment environment. Now, he understands [that] you’ve got to have a portfolio. You’ve got to be nimble. If you see a trend, you’ve got to be able to invest in that trend. If it’s a private company – or if it’s handled by a big investment bank or on a giant stock exchange – you don’t really stand a chance. This democratises investing.

Koshiek Karan on communicating the benefits of Altvest to younger people:

Like Rob and Warren, I spent a large part of my career in investment banking and understand how the privilege of information works. How am I going to do it? My job is actually very easy. Right now, in capital markets and in investing as a whole, there’s an inflection point where retail investors have really seized the bull. Robinhood is IPO-ing today – where would you have ever thought [that] a company that democratises access to retail investing fetches a valuation of close to U$40 billion?

Retail investors as a whole – as a community that we represent – have a large, deep distrust for financial institutions. They’ve been let down many times before – high fees in retirement annuities, high brokerage cost, unable to access basic financial products. They have an even deeper distrust of government.We’re all in South Africa. We all know that the government can’t run a bath, let alone a country. If you have retail investors that don’t trust the government and financial institutions and need the platform to have the ability to democratise access to information? That’s where we come in. We’re making it possible.

Warren Wheatley on how Altvest is going to work:

What’s great about Altvest is that it’s going to almost remove ourselves almost, in a way, we will be going off the grid from an economic perspective. Finally, we’re remove government, banks and the stoic, old-style thinking financial institutions. We are going completely off grid. It’s man-to-man, woman-to-woman, entrepreneur-to-investor – having frank discussions on a platform that allows for it at mass. For me, that’s the best way to describe it. We’ve just removed all the barriers to entry – or as many as we can – and given people the tools to communicate with each other.

Let’s just get the job done. That’s it. These things should start mattering less and less. Pricing and emotion should matter less because, you’ll drive past a hotel that you own every day and you’ll make your buying decision on how many cars are in the parking lot or not. Or, you’ll attend a boutique cinema. You’ll attend every Friday night. After a few Fridays of being the only person in the cinema you’ll you’ll make a sell decision – not based on factors that don’t actually drive value. We are removing ourselves from all these headwinds that blow leaves but don’t actually move the needle. That’s sort of what Altvest is going to be doing.

Warren Wheatley on how Altvest will choose and filter potential companies/investments:

We have a number of processes that will help us filter. It’s a combination of of technology. There will be a platform that the budding entrepreneurs would have to go through. It’s not dissimilar to a credit application with the bank – that’s the starting process. It’s just submitting the core information to do a financial assessment. We’ll then screen those and make a number of opportunities available to the public for open discussion – almost a menu Each company would have access to data rooms and the entrepreneurs would then go through a series of media processes.

The filter will be made up of tech that does robust financial analysis and filtering. We will have an IC (investment committee) made up of some seasoned professionals who will help [with the vetting process], but then it’s going to be handed over back to the community and all the wannabe investment bankers [and] wannabe chartered accountants are going to have a go at doing their own valuations. Much the way that large markets work – where information is distributed equally – we will arrive at a price and a valuation. We hope with enough eyes on every opportunity, we’ll squirrel out the best ones. Once we’ve done that, people are going to be able to put cash and participate in the growth of those.

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