Equi, a New York-based alternative investment strategies platform, has raised $15m in Series A funding.
The round was led by Smash Capital with participation from Company Capital and Montage Ventures.
Equi is on a mission to make “elite investing” more accessible.
Over the past 20+ years, Equi said investors and advisors have increasingly relied on a passive portfolio of stock and bond indexes to grow their wealth. However, with the end of the easy money era and the bull market of the past 12 years, the company said the traditional 60/40 stock/bond portfolio is dead.
Equi pointed to the trend, which it called a “dirty secret” of the wealth management industry, is that every ten to twenty years, there are “lost decades” in equity markets. This is where volatility covers up the fact that markets have moved sideways, not upwards, for a period. The most recent example of this is 2000-2012.
Equi believes the solution to this is adding a core, 50% allocation of non-correlated alternatives. This will reduce risk and increase returns, according to the company, especially in a more volatile and uncertain market.
However, Equi said “not all alternative investments are created equal”.
Most private wealth managers and banks are restricted to a very limited list of what they call “alternatives,” but these lists are often filled with low-performing brand-name funds and those that can afford to “pay to play.” They’re also passively managed, meaning funds are purchased and left alone.
Typically, only the most highly resourced family offices and/or private hedge funds have been able to access a highly curated and actively managed portfolio of alternative investments. Equi wants to change this.
Equi aims to source top-tier managers and investment strategies from around the world that demonstrate low correlation to capital markets. Equi’s asset management team leverages data on more than 12,600 different funds to create portfolios that are designed to preserve and compound wealth in all markets. The portfolios are actively managed, ensuring that positions are hedged in the most pertinent market situations, such as those seen across this year.
“We’re on a mission to provide access to elite investing, but that starts by educating around and redefining what “elite investing” truly means,” Equi said.
Earlier this year, Micro investing platform Wombat closed its Series A round on £4m, as it gears up for international expansion.
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