For a sum of $350,000, which is just five times over the median household income in the U.S, people can invest with Equi, which is focused on alternate assets, which is a common place that billionaires used to grow.
Ultra-high net individuals that invest in alternate assets often work with family offices that manage their investments. With Equi, millionaires can also invest in their strategies. They also wouldn’t have to put down $70 million in initial capital, which the company says is usually required to access these strategies.
Alternative assets are appealing to certain investors because they often provide higher returns than bonds or stocks. Equi offers a range of alternative assets in its flagship investment fund, which also includes private equity, hedge funds, private real estate, venture capital.
The Equi flagship fund launched a year ago and has an annual target return of 17-23 percent. To invest with Equi, an individual has to qualify as an accredited investor, which can happen by having an annual income of about $200,000 for individuals, and $300,000 for couples. Around 1 in 10 American households fall under this category.
Although the company serves a small fraction of investors, Equi hopes to scale its offerings to take on investors with lower minimums, even if they are not accredited.
“The traditional investment advice of just dollar-cost averaging into Vanguard funds, and hoping everything’s going to be okay — that was true, and that was good advice for, let’s say, the past 40 years that we’ve been in this declining interest-rate environment,” said Co-founder and CEO, Tory Reiss.
“But then, once I got to a point where I actually had enough money to invest and could afford to look at different asset classes, I started really studying real estate and private credit,” he added.
Reiss is optimistic about the market that Equi is targeting, and noted that accredited investors alone have an estimated $73 trillion in investable wealth.
“I’ve seen ultra-high net worth investors, endowments and multifamily offices shift over the past 20 years towards having almost half their portfolios in alternatives, but if you look at the kind of mainstream consumer, they’re still low single digits,” Reiss said.
