Altea’s Latest News: November 15 – Alts.co

Let’s dive into the latest from Altea, where we highlight all the exciting opportunities unfolding this week.

Here’s what to look out for:

• A personal request
• Updates on our deals
• New ventures on the horizon
• The due diligence process
• Current funding opportunities

Not yet a member? Join us today and enjoy exclusive perks like:

• Zero fees on Altea SPVs
• Luxurious field trips with fellow investors to far-off places
• Networking with hundreds of insightful people (and me, of course)

Let’s Get Started!

A Personal Request

Over the past few months, I’ve developed a unique AI agent designed to evaluate investment deals. Just upload a deal memo or presentation, and it’ll provide a quick analysis of what’s on the table. As our AI evolves, I’m looking for more deals to test and refine it. Got an opportunity you’re curious about? Share it with me and let’s dive into the details together.

Deal Updates

Art I and Art II

Our artistic ventures in 2024 have truly exceeded expectations. Art I, featuring our Ithell Colquhoun collection, has seen another sale. We purchased Elemental for £25k back in January and just sold it for £51k last week. This follows previous successes with Volcano in October and Hyacinth & Cyclamen, along with Amaryllis earlier in March.

In less than a year, this SPV has moved four of its seven pieces, nearly doubling the initial investment. Meanwhile, Art II, a Frank Auerbach self-portrait, is poised to rise in value following his recent passing.

Sadly, we missed a few chances:

• Leon Kossoff’s “Hackney with Germany Hospital”

  • Purchase cost: £90,000
  • Estimated value: £150,000

• Three Phoebe Boswell original paintings

  • Purchase cost: £222,750
  • Estimated value: over £500,000
• Frank Auerbach’s “Mornington Crescent”
  • Purchase cost: £2.5 million
  • Estimated value: £4.5 million, now £8m+

Why did these slip through our fingers? Mainly due to timing and fees. Quick sales in the art world require immediate funds, and fundraising or SPV closures often aren’t swift enough. Plus, the cost of transactions isn’t trivial; brokers and dealers claim around 10% on both ends of a sale, which can eat into profits.

Take the Kossoff, for instance; buying at £90,000 doesn’t account for £18k in fees, pushing the cost to £108,000. Selling it for £150,000 incurs another £30k in fees, leaving investors with just an 11% return from an apparent 67% gain.

To tackle these challenges, I’ve crafted a vehicle aimed at sidestepping these issues, and I’d love to have you onboard.

New Opportunities

Art Opportunity I

This initiative addresses the timing and fee issues we’ve faced. We’re assembling a $1 million fund, ready to act quickly on promising investments. By having readily available cash, we can seize those fleeting opportunities.

I’ve also brought Nicho, our art broker, on as a co-GP for Art Opportunity 3. Instead of charging per transaction, he’s on a $50k annual retainer, keeping costs predictable. For a typical $1 million cycle, investors would usually spend $200k in fees. Our approach drastically lowers that, and reinvested profits will further maximize benefits.

This five-year fund is committed to acquiring and selling art with the highest internal rate of return (IRR). Sold works will replenish the investment fund, keeping momentum rolling.

As a real-world example, we have an exciting opportunity lined up that exemplifies our strategy:

• [Artist Redacted], Large Oil on Canvas
  • This unique piece comes from a distressed sale by a former Turner Prize winner.
  • Acquisition cost: £250,000 with no fees.
  • Recent similar sales hit £381,000. We aim to sell it for over £400,000 come early 2025.

The current owner can’t wait for a year, and flipping it would damage relationships with their gallery due to longstanding policies.

Deal Details:

• Minimum Investment: $10,000
• Expected IRR: 25% to 40%
• Total Target: $1 million (Remaining: $350k)
• Management Fees: 0% for Altea members, 2% for others
• Carry: 20%
• Type: Equity in an art investment fund
• Timeline: 5 years
• Sponsored by Altea in collaboration with Nicholas "Nicho" Marks

We’re closing in on our $1m goal with about $650k committed. The offering has been assessed using our Deal Analyzing Agent (still searching for a better name!), and the preliminary results are promising.

Explore and invest in this opportunity.

The Jackson Apartments Acquisition

Here’s a deal submitted by one of our members, vetted through our AI Analyzer.

Key Details:

• Minimum Investment: $50,000
• Target IRR: 19% with an equity multiple of 2.36x over 5-7 years
• Total Investment Size: $2.7 million acquisition with a $725k CapEx budget
• Type: Equity in a value-add multifamily property
• Timeline: 5-7 years
• Sponsored by Ocean Ridge Capital

Overview: Ocean Ridge Capital plans to acquire The Jackson Apartments, an 86-unit Class C property near Texas Tech University in Lubbock, Texas. They aim to bolster value through upgrades and renovations, leveraging its prime location and current underpricing to attract high-net-worth investors seeking robust risk-adjusted returns.

Join the conversation and learn more.

California Carbon Credits

This opportunity offers annual revenue generation through carbon credits in a tightly controlled market, enforced by California law.

Key Details:

• Investment Size: $15 million (Founder Class)
• Minimum Investment: To Be Decided
• IRR Potential: 15% to 30%
• Type: Physical Ownership of Carbon Allowances
• Duration: Evergreen (1-year lock-up with early redemption fees)

Overview: Access Environmental Capital invites investors to engage directly with California Carbon Allowances (CCAs), the second largest compliance carbon market worldwide. This investment strategy melds potential high returns, protection against downside risk, diversification, and a positive environmental impact. The fund anticipates significant returns as the market transitions from excess to scarcity by 2024/2025, with possibilities of doubling or tripling by 2030.

Join the discussion​ on this innovative opportunity.

Undergoing Due Diligence

The Car Crowd – Three Ferraris

Key Deal Details:

• Investment Size: ~$500k to $550k, contingent on currency fluctuations
• Minimum Investment: $10k
• Duration: 4 years
• Management Fees:
  • Altea members: 0%
  • Non-members: 10%
• Carry: 10%

This deal invites investment in iconic Ferrari models, specifically the Ferrari 328 GTS, Ferrari Testarossa, and Ferrari 355 Berlinetta. By purchasing in the UK, where certain left-hand drive Ferraris are underpriced, and later selling them in the US market, investors can capitalize on both value appreciation and geographic pricing differences.

Dive into the full deal details​, including conversations with the sponsors.

Engage with the community in the discussion.

Wrapping Up

Launch Film Bridge Fund

We’re nearing the close of this opportunity next week. If you’re interested and haven’t invested yet, now’s your chance.

Deal Essentials:

• Investment Size: $5 million
• Minimum Investment: $20,000
• Possible IRR: 20% to 40% (varies with performance and share class)
• Type: Debt via Bridge Loans
• Duration: 5 years

Check out the most recent performance and consult the detailed Deal Memo.

Join us in the dialogue about this fund.

Coming Up…

• Horse Pin-hooking
• Wine Trade Finance

That wraps it up for this week. We’re eager to hear your thoughts, questions, or any insight you might have.

Best,
Wyatt, Stefan, and John