Alt Investing: Is it Good for the Masses?

We are glad to see you again! Dan DeFrancesco This is New York.

Today’s stories include how SBF spent his fortune and why Gen Z may be in financial trouble. We also have some photos of the moon. 

First, consider your risk tolerance.

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1. Democratizing alternatives

Would you like to make an investment in a hedge fund. You might also consider investing in a private-equity company. Maybe you are more interested in a fine piece of art? Perhaps you prefer a vintage wine bottle?

These aren’t real opportunities for everyday investors. Those investments — commonly referred to as alternatives — are only for the wealthy and institutional investors. 

Startups are disrupting finance in many ways, and startups are changing the rules when it comes down to who can get in on alts. 

Fintechs help to make it easier for investors to access these assets via fractional shares and pooling money together.

Is this a good thing or a bad thing?

Venture investors say not. Asia Martin, Insider, spoke with VCs skeptical of startups expanding access to these potentially risky and illiquid assets.

Asia points out in her story that it is not about denying access to these assets. It’s about making sure that retail investors don’t get pushed into complex things they don’t know.

This is a very common issue in fintech, Asia reminded me. Education often takes priority over access. Simply put, letting someone do something financial is more important than letting somebody know. What They do it in finance. 

This may seem all too patronizing to some people who read it. “Surprise, surprise. “Rich people don’t want middle class investors getting in on their investments.”

And I get it! It is important to treat adults as adults, and let them make their own mistakes and decisions. 

What happens if things turn sour? Perhaps your PE fund money is held up for longer than you thought. Perhaps the piece of art you bought isn’t as valuable as you expected. Or will you just take it all in and move on? Or will you complain about your ignorance and take your lumps?

Click here for more information about opening up alternative access and why some VCs question it.

In other news

2. All the financial advice on TikTok does not work. One New York Fed researcher pointed out that Gen Zers are seeing an increase in late credit-card payment. More information on how Gen Z might be in trouble. 

3. Here are some people who can read the fine print as activist campaigns increase. We have identified 13 lawyers that are either in support of activist funds or against them. Check out our entire list. 

4. Here’s how SBF spent all of his money. This is what the FTX founder spent his money on, from political donations to sports teams. 

5. These are the startups tech professionals want to work with. Top VCs were asked to help us identify the top startups that enable developers to build apps for cloud computing. Here are 11 promising DevOps startups. 

6. Credit Suisse: Tough times The Wall Street Journal reports on how clients pulled their money out of the Swiss bank in a critical time for them. 

7. Is it possible to lose your luggage on a business trip? A ramp agent at LAX for a major airline spoke with us about the tracking of your luggage and what to do if it is lost. You can read more about it here.

8. Cliff Asness of AQR is a good example. His hedge fund is now making huge returns in spite of a downturn. Bloomberg spoke with him about everything, from his problems with the private market to his resentful attitude towards the meme-stock universe. 

9. The bankers won’t believe this, but the guy hopes that the Kroger-Albertsons deal of $25 billion doesn’t occur. Paul Constant is a writer at Civic Ventures and argues that the deal won’t be good for employees or shoppers at either chain. You can read his thoughts here. 

10. The far side. NASA’s Orion Spaceship is cruising around to the moon, and we have photos that show it. These are the kind of missions that would make Pink Floyd proud. You can see them here.

You can keep up with all the business news by listening to The Refresh From Insider, an audio news brief. Listen here.

Edited by Jeffrey Cane. @jeffrey_cane) in New York and Hallam Bullock (tweet @hallam_bullock) in London.