AltExchange with Kareem Hamady | E303
Organizing and stewarding alternative investments.
In this episode of “Fintech Impact” we have Kareem Hamady, Co-Founder and CEO of AltExchange. The company is a platform that helps advisors better manage all the complexity around the issuance, management, and stewardship of alternative investments in the marketplace. Kareem provides an overview of AltExchange, a company focused on aggregation and automation technology for alternative investments (alts). The company retrieves data from various platforms, including PDFs and spreadsheets, and uses machine reading technology to make sense of the data.
Episode Highlights:
02:29: The discussion frames the problem by highlighting the challenges of dealing with alternative investments compared to more traditional assets like ETFs or mutual funds. The lack of standardized identifiers and diverse reporting metrics in private capital markets adds complexity.
03:10: Kareem details the challenges in private capital markets, emphasizing the absence of standardized identifiers, varied reporting metrics, and the need to structure non-structured data.
04:37: Kareem discusses the challenge of accessing investment information spread across different platforms. Unlike stocks or bonds, where one can use any brokerage account, alternative investments may be administered on various platforms, requiring aggregation for a centralized view.
05:37: Kareem explains AltExchange's involvement in the post-investment phase, focusing on tracking actions and workflows after the investment is made. The process includes receiving quarterly reports, annual tax documents, capital calls, and distributions.
07:03: Jason emphasizes the industry's convoluted process of turning structured data into PDFs, requiring the reconstruction of data back into a database for analysis and reporting. He also questions the complexity of the data extraction process, especially in dealing with diverse and esoteric deals.
09:25: Kareem describes the normalization process for line items on CAP account statements, making the comparison between different asset managers more straightforward. Despite being time-consuming, the goal is to simplify the understanding of performance.
10:11: Jason shifts the discussion to the duty of care for advisors and how AltExchange facilitates workflows beyond reporting. Kareem explains the onboarding process, where the advisor provides minimal client information, and the client signs a reporting authorization letter.
12:36: Kareem highlights additional workflows, such as distribution alerts, enabling advisors to be aware of client transactions and provide timely advice. The platform consolidates information, saving advisors time and allowing them to focus on investment advising.
13.38: Kareem discusses additional workflows, such as managing capital calls and distributions. The platform allows advisors to set calendar invites, providing clarity on the purpose and amount of wire transfers. This proactive approach reduces confusion for clients and advisors.
15.53: Kareem describes AltExchange's business intelligence quality checks (BI QC rules), which constantly run to ensure data consistency and accuracy within the system. The platform aims to maintain data integrity and prevent issues like unrealized value spikes.
17:56: Kareem highlights AltExchange's role as a data exchange, emphasizing neutrality and interoperability with various systems. The platform aims to provide a centralized place for data while allowing users to work with their preferred CRM or portfolio management system.
19:31: Kareem emphasizes the importance of data sync workers in aggregating data and X-degradation for sending data to various systems. AltExchange aims to build and maintain sync workers to gather data from new sources and streamline partnerships.
20:28: Jason inquiries about AltExchange's future direction. Kareem discusses the potential for AI-driven summarization of asset manager quarterly updates, benchmarking, and exposure analysis.
22:09: Kareem talks about breaking apart AltExchange's tech components, allowing users to purchase specific functionalities. The platform has rebuilt sorting and extraction models, offering a modular approach for users who may not want to use the entire AltExchange ecosystem.
24:02: Kareem expresses excitement about working on a solvable problem with technology in its early stages. The substantial growth of private capital markets and the increasing complexity for advisors present a massive problem that AltExchange aims to address with innovative solutions.
Key Points:
Private capital markets pose challenges due to the lack of standardized identifiers and diverse reporting metrics, making it more complex than dealing with traditional assets like ETFs or mutual funds.
AltExchange addresses challenges in the post-investment phase, helping advisors track actions and workflows after an investment is made.
AltExchange facilitates various workflows, such as onboarding, distribution alerts, and managing capital calls and distributions, streamlining the advisor's role, and enhancing client communication.
Tweetable Quotes:
"AltExchange simplifies the complex world of alternative investments by aggregating and automating data from various platforms, using machine reading technology to make sense of the data."
"Navigating private capital markets is challenging due to the lack of standardized identifiers and diverse reporting metrics.”
"Exciting times in the fintech space! AltExchange leverages AI to drive innovation, from summarizing asset manager updates to benchmarking and exposure analysis. Solving complex problems with technology in its early stages."
Resources Mentioned:
Facebook – Jason Pereira's Facebook
LinkedIn – Jason Pereira's LinkedIn
Woodgate.com – Sponsor