Alto's Eric Satz - retirement assets: the next frontier for private markets?

Alt Goes Mainstream: The Latest on Alternative Investments, WealthTech, & Private Markets

Welcome back to the Alt Goes Mainstream podcast.

Today’s episode dives into an important and growing part of the private markets ecosystem: how investors can access and invest into alternatives through their retirement funds.

We have Eric Satz, the Founder & CEO of Alto, a self-directed IRA custodian, with us today to discuss how he’s on a mission to provide everyday Americans with the same investment opportunity long favored by institutional investors.

Alto provides custody for a wide array of alternative assets, including private companies, real estate, crypto, loans, and securitized collectibles.

Alto has streamlined the process for companies, funds, and SEC-registered investment platforms to include IRA investors in their offerings. They’ve partnered with firms across the alts space, including AngelList, Coinbase, EquityZen, Republic, Masterworks, and others, to enable investors to invest into private markets with their IRA.

Eric is a serial entrepreneur and former investment banker. He worked at DLJ / Credit Suisse First Boston before co-founding Currenex (acquired by State Street for $564M), Plumgood Food, and Tennessee Community Ventures. His passion for entrepreneurship led him to serve on the Board of the Tennessee Valley Authority from 2015 to 2018 and he teaches an entrepreneurship class to high school students.

On today’s podcast, Eric teaches us all about the merits of a self-directed IRA. We had a fascinating discussion about why and how it makes sense to use an IRA to invest into private markets investments and how he’s taking lessons learned from prior IRA businesses to build Alto.

We discussed:

• Rethinking retirement investing.
• The evolution of the self-directed IRA market.
• Alto’s vision: TurboTax for IRAs.
• Structural challenges with using IRAs for private markets investments.
• The role of technology with streamlining retirement investing.
• The evolution in investor awareness of retirement investing.
• The importance of duration matching.

Thanks Eric for coming on the show to share your knowledge and passion for alternatives.

Show Notes
00:00 Introduction: Going Mainstream

00:38 Welcome to Alt Goes Mainstream Podcast

00:52 Introducing Eric Satz and Alto

01:33 Eric's Background and Entrepreneurial Journey

01:57 The Mission of Alto

02:01 The TurboTax for IRAs

02:05 The Importance of Retirement Accounts in Private Markets

02:29 Welcoming Eric to the Podcast

02:37 The Evolution of Private Markets and IRAs

02:51 The Beginnings of Alto

03:13 Challenges in Self-Directed IRAs

03:54 The Vision for Self-Directed IRAs

04:28 Changing Conventional Wisdom on Retirement Investing

05:40 The Demographics of the IRA Industry

06:21 The Growth of IRA Accounts

06:38 The Allocation to Alternative Assets

07:36 Barriers to Private Market Investments in IRAs

07:50 Psychological Barriers to Alternative Investments

08:35 Structural Challenges in Using IRAs for Private Investments

08:53 The Role of Technology in Streamlining Investments

09:02 The Launch of Alto with AngelList

10:05 The User Journey in Private Market Investments

10:43 The Role of Financial Advisors

11:10 Educating Investors on Private Markets

12:25 The Evolution of Investor Knowledge

12:35 The Importance of Tax-Advantaged Investments

13:11 The Financial Advisor's Perspective

14:05 The Benefits of Illiquidity in Private Markets

15:54 The Role of Large Asset Managers

16:17 The Branding of Private Markets

16:45 The Growth of Athene and Financial Advisors

16:57 The Importance of Current Income in Retirement Accounts

17:43 The Younger Generation's Investment Behavior

18:05 The Impact of Evergreen Fund Structures

19:04 The Role of Asset Management Firms

20:02 The Future of Private Market Solutions

20:15 The Role of Alto in Private Market Investments

20:54 The Importance of Infrastructure in Private Markets

21:44 The Evolution of Alto's Business Model

21:50 The Growing Awareness of Private Markets

23:57 The Role of the Alto Marketplace

24:35 The Inclusion of Crypto in IRAs

25:17 The Challenges of Transitioning Assets to IRAs

25:50 The Impact of Friction on Investment Decisions

27:46 The Success of Alto's Technology

28:35 The Role of Funds in Promoting IRAs

29:36 The Future of Private Markets and Wealth Channels

31:11 The Role of Financial Advisors in Private Markets

31:58 Educating Financial Advisors on IRAs

32:13 The Importance of Conferences and Networking

47:13 The Future of Private Markets and Retirement Accounts

47:32 The Role of Regulations in Private Market Investments

50:27 Conclusion: The Potential of Retirement Accounts in Private Markets

Editing and post-production work for this episode was provided by The Podcast Consultant.