Alt Investments

CoInvestor Claims To Shake Up Alternative Investments Access

Tom Burroughes Group Editor London 7 June 2018

CoInvestor Claims To Shake Up Alternative Investments Access

This publication recently spoke to the UK firm about how it says it is using technology to help advisors/clients gain faster and more efficient access to alternative investments.

A regular theme in the alternative investment space is how to make the various asset classes more accessible as even high net worth individuals can struggle to get a seat at the table.

Putting clients’ money into private equity, venture capital, hedge funds, commodities and property – to name a few – can be tricky for financial advisors without tools at their disposal. All too often, therefore, the line of least resistance is taken and money does not enter the arena.

But if the investor is willing to accept the lower liquidity that some alternative asset classes contain so as to earn the premium and diversification benefits, missing out seems a costly mistake. And one that the UK-based firm CoInvestor claims it is able to avoid.

CoInvestor, founded in 2015 by investment luminary Charles Owen and operating out of London and Canterbury, uses digital tools so that alternative assets can be accessed as easily as possible, it says. Another offering from this firm is its CoInvestor Connect, a direct investment platform for sophisticated private investors and family offices. Clients can put money into funds and single-company co-investment opportunities.

“We expect to announce further new hires shortly,” Owen told this publication in a recent interview. High-profile appointments have been those of Rob Ferguson as chief operating officer, COO at IG Investments at IG Group. It has worked with venture capital firm Oxford Capital, and recently added private equity to the CoInvestor menu of alternative assets.

“Our real strength is the application of a digital solution that focuses purely on the management of the alternative asset sector, enabling us to specialise in these highly variable and sometimes extremely complex instruments,” Owen said.

“Because the majority of alternative assets are unquoted, these long-term and generally illiquid investments have an increased probability of post-investment corporate actions not typically found in more straightforward listed equities,” he continued explaining his colleagues and their technology have the kind of very specific information on tap to thrive in this space.

The need for ways to access alternative assets is growing from being a “cottage” industry into something more mainstream, driven by how a squeeze on UK tax relief on annual pension allowances is forcing a need for different options, as well as an increased focus on retirees. Modern technology developments are also powering new platforms that would not have been viable a few years ago.

There are already moves in different countries to open up the alternatives space. In March this year, for example, a Luxembourg-based securitisation platform, Transparency Capital, said it was breaking new ground by widening access to private equity. It gives access to major European private equity managers with a minimum stake of €150,000 ($184,911). In October 2017 OppenheimerFunds and The Carlyle Group formed a joint venture to offer high net worth investors and advisors private credit opportunities.

In the UK, meanwhile, regulators’ tight focus on investment suitability means availability of alternative assets, even if advisors have access and knowledge about them, can be difficult. Even so, with tax-efficient structures such as Enterprise Investment Schemes, some degree of access is open to mass-affluent and HNW investors at certain levels. Technology is helping to smooth this process.

What advisors want
“This increase in demand has created a business need amongst advisors, fund managers and investors, for a much more efficient environment in terms of allocation,” Owen continued.

Owen said his firm aims to be “the leading” software-as-a-service for the management for alternative investments, offering cloud-based software to advisors.

And Owen eschews the rather clichéd embrace of “disruption” so often parroted by today’s providers of technology. What he offers is not disruption but a set of solutions, he said.

“Our solutions are not disruptive but instead designed to support and integrate to existing operations and systems. We understand the need for businesses to maintain tight control over their security and client data when operating in a highly regulated environment,” Owen said.


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