🎥 Eric Satz of Alto: Are Retirement Assets the New Frontier in Private Markets?

Welcome back to the Alt Goes Mainstream podcast, where today we’re diving into a fascinating corner of the private markets ecosystem—how you can tap into alternatives with your retirement funds.

We’re thrilled to have Eric Satz, the Founder & CEO of Alto, joining us. Alto is a self-directed IRA custodian, and Eric is on a mission to democratize investment opportunities, bringing options traditionally reserved for institutional investors to everyday Americans.

For those eager to listen, you can catch this episode on Apple Podcasts or Transistor.

Alto specializes in managing a broad range of alternative assets, like private companies, real estate, cryptocurrency, loans, and securitized collectibles. By simplifying the process, they’ve enabled companies, funds, and SEC-registered investment platforms to include IRA holders in their investment offerings. Partnering with players like AngelList, Coinbase, and Republic, Alto empowers individuals to dive into private markets using their IRA.

Eric isn’t new to the entrepreneurial landscape. With a background in investment banking at DLJ/Credit Suisse First Boston, he went on to co-found Currenex, which was later acquired by State Street for a cool $564 million. He’s also founded companies like Plumgood Food and Tennessee Community Ventures. His passion for entrepreneurship extends to serving on the Board of the Tennessee Valley Authority from 2015 to 2018 and teaching high school students about entrepreneurship.

In our conversation today, Eric sheds light on the benefits of a self-directed IRA. We explore why using an IRA for private market investments is not only sensible but potentially transformative, applying lessons from earlier IRA businesses to shape Alto’s future.

Here’s a peek into our discussion:

• Rethinking how we approach retirement investment.
• The transformation and growth of the self-directed IRA niche.
• Alto’s ambitious goal: becoming the TurboTax of IRAs.
• Navigating structural hurdles of using IRAs for private investments.
• Technology’s role in simplifying retirement investing.
• Growing investor awareness about retirement strategies.
• The critical aspect of aligning investment durations.

A big thank you to Eric for coming on the show and sharing his insights and dedication to alternative investments.

In our episode snippets, we covered:

1. The reasons more investors haven’t opted for private market investments with their IRAs.
2. How and when investors should consider using retirement accounts for private markets.
3. The potential of self-directed IRAs in opening access to private markets for a wealthier audience.
4. Collaborating with financial advisors.

And don’t miss the detailed show notes for a deeper dive into our topics, timestamps included:

00:00 Welcome: Setting the stage for today’s enriching discussion.
00:51 Eric Satz jumps in to share insights on private markets.
01:22 Exploring Alto’s mission and strategic partnerships.
01:33 Eric’s journey from investment banking to entrepreneurship.
01:57 Discovering the self-directed IRA magic.
02:01 Why Alto is aiming to be the TurboTax for IRAs.
02:05 Diving into retirement accounts and private investments.
02:29 Greeting Eric to the podcast formally.
02:37 Understanding the evolution of private markets and IRAs.
02:52 Alto’s inception story.
03:14 Tackling the complexities of self-directed IRA investments.
05:12 Aligning long-term assets with long-term savings.
05:53 The rising trend of IRA accounts.
06:52 Exploring private market investments with IRAs.
07:53 Overcoming barriers to private market investments in IRAs.
08:09 Delving into psychological and structural challenges.
09:22 Emphasizing technology’s place in IRA investments.
09:31 Unveiling Alto’s partnership with AngelList.
10:43 Crafting the investor journey in private markets.
11:24 Educating investors and advisors on alternatives.
14:03 The changing landscape of financial advisors.
15:03 Why illiquidity sometimes acts as an investment advantage.
18:30 Discussing income generation and tax benefits.
18:58 How younger generations view volatile investments.
19:39 Understanding the power of compound returns in private markets.
20:22 Reflecting on asset management and diversification.
21:36 The significance of infrastructure solutions.
25:38 Alto’s marketplace and the Crypto IRA journey.
27:41 Minimizing friction in IRA investments.
29:49 Celebrating Alto’s tech-driven successes.
30:56 Alto’s collaboration with major asset managers.
31:43 Exploring the burgeoning wealth channel.
32:41 Comparing direct-to-consumer to intermediary models.
34:12 Highlighting the importance of educating financial advisors.
34:42 Discussing grassroots education initiatives.
35:13 The influential role of financial advisors in private markets.
36:46 Unlocking retirement funds for private investments.
37:45 Understanding the role of asset managers in education.
39:05 How brokerages play a part in private market investments.
41:06 Reviewing asset evaluation challenges.
42:17 Sharing visions for the future of private market investments.
43:12 Outlining Alto’s vision for tomorrow.
44:46 A glimpse into the role of defined contribution plans.
45:52 Evaluating legitimacy and participation in private markets.
46:13 The rising profile of private equity in retirement solutions.
47:11 Weighing diversification in public and private markets.
48:02 Borrowing against existing private market holdings.
48:44 Distinguishing regulatory differences in 401ks and IRAs.
51:20 Advocating for common-sense regulation in investments.
52:41 Forecasting exciting investment trends on the horizon.
53:56 Wrapping up with concluding thoughts.

Our thanks to The Podcast Consultant for their editing and post-production expertise.