The 11/12/19 email discussed Dynasty Wealth’s (DW) leveraging Aliso Advisor’s (“Aliso”) professional investor alternative investments platform to produce capital gains.  The gains will be an additional source of distributable cash flow to the partners.     

According to Institutional Investor magazine by 2023: 

  • Alternative investments made by professional advisors which are growing by 59%, will reach $14 trillion
  • Private equity will overtake hedge funds as the largest alternative investment asset class.

Demand for alternative investments is growing rapidly because a manager’s fee is based on value of the assets and the risk is high that stocks could decline significantly:   

  • Stock valuation ratios are near all-time highs
  • The next recession which could cause a 60% decline in stocks is long overdue

With a decline in traditional assets looming the only solution for an advisor to protect their clients’ assets and their fee income is alternative investments.  With the only exception being hedge funds all alternative investments do not trade on an exchange.    Therefore, they are immune from stock and bond market volatility.  Below are some of the alternative asset classes:

  • Private debt instruments
  • Real assets
  • Venture capital and startups
  • Commercial real estate

Dynasty Wealth is uniquely positioned to capitalize since it has product offerings which cover two of the alternative investing asset classes:

Aliso Advisor’s alternative investments portal for investment advisors is the final piece of the private capital markets infrastructure that Dynasty Wealth started building in 2015.  The differences:

  • Aliso Advisors (Aliso) portal was designed to meet all of the regulatory and compliance requirements for investment advisors to invest in alternative investments for the behalf of their individual clients.
  • DW’s infrastructure was designed for individual investors who make their own investment decisions. 

When Dynasty Wealth shifted its focus from individual investors to investment advisors in August 2019 it unknowingly put itself in the position to leverage what Aliso had been building.  Dynasty Wealth had assembled the private capital financing and secondary markets infrastructure that was needed for investors who make investment decisions.  What DW had not developed was the compliance system that was required for investment advisors to efficiently invest into alternative investments including startups. 

Aliso is a one stop shop for Dynasty Wealth.  Aliso’s investment advisor clients who have an aggregate of $1.4 trillion of assets under management (AUM) could potentially invest:

  • 10 percent or $140 billion into hedged products including the Bull & Bear Tracker which has a capacity of $10 billion
  • Five percent or $70 billion into startups and private equity including Dynasty Wealth’s startup and early stage portfolio companies

The Aliso alternative investments portal enables:

  • Dynasty Wealth to grow its base of startup company clients.
  • Increases the probability of success for each of Dynasty Wealth’s startups since they will have access to the $70 billion that Aliso’s advisors will be allocating to startups.  

In the next decade Dynasty Wealth’s startups business has the potential to produce more cash flow and be more valuable than the Bull & Bear Tracker.  It’s because the shares or options that Dynasty Wealth receives from a startup client have the potential to be valued for $50 million upon the startup becoming successful.  For perspective, the cash flow per a $10,000 partner stake from each $50 million gain would be approximately $50,000.