AltAlpha: Introducing an Array of Three Unique Strategies for the New Era of Investing
As we push farther into the “New Era of Investing”, BFI Consulting has worked on alternative investment strategies that might provide some value added, both in terms of wealth protection as well as growth. With this in mind, AltAlpha Strategies was born, and the first three collective investment strategies introduced to a prestigious group of institutional investors during a Breakfast Briefing in Zürich on November 23rd.
We shared information on the November 23rd Breakfast Briefing in Zürich a couple of weeks ago. At the event, our AltAlpha Strategies team introduced three strategies, which in combination cover an interesting array of risk profiles, offering both “offense and defense” to a well-rounded portfolio. Specifically, and without much ado, the following slide from the presentation summarizes the three strategies.
As we venture deeper into a period that is very different from what we have become accustomed to over the past 30 to 40 years, the AltAlpha investment strategies therefore reflect BFI’s efforts of providing effective and innovative alternative investments strategies and advisory services specifically suited for the challenges - and the opportunities ahead!
I was at the Briefing last week, and I want to share a brief recap of the Briefing and some information on the strategies presented.
For more detailed information, I recommend you contact BFI Consulting, or you visit the AltAlpha Strategies website. You will find facts and figures for all three funds there, subject to the standard legal disclaimers and declarations.
There was a full house for the Breakfast Briefing, quite interesting considering attendees started showing up at 7:30am for the program which started at 8:00am. But what was more interesting was the background of those that came for the event: we had asset managers, hedge fund managers, and crypto fund managers. The banking sector was represented, as well as financial advisors and family office managers. And there were investors, both professional and institutional, as well as members of the media in attendance.
The Briefing started with an introduction to BFI Capital Group, and background information as to why AltAlpha Strategies and the 3 Funds grew out of the current investment environment. We’ve been talking about this “New Era” of investing for over 2 years already at BFI, and it derived from what we had described in 2020 already as a Big Picture that showed major signs of being “artificial, bloated, and overdue”.
Excessive debt is a main culprit: ultra-loose monetary and fiscal policies resulting from excessive public and private debt created market imbalances and today, rising inflation and interest rates. Although excessive debt created much of the problems today, it has been accompanied and exacerbated by an already slowing global economy, growing geo-political and social tensions, and an energy crisis in the west, to name just a few.
As a result, AltAlpha Strategies’ mission was to “strive for and contribute to innovative and effective alternative investment solutions that address these challenges of new era investing”.
After the set-up of the “why”, the presenters dove into the “how” of the Funds. Here were the key points that were focused on in describing each of the Funds. More information can be found, as well as where you can inquire for additional investment documentation, by visiting the direct links provided.
A curated and diversified portfolio of crypto/digital asset hedge funds, with the potential of large returns at a reduced volatility. The case for the fund of funds approach was made in that it was important to not place all of your (digital asset) eggs in one basket, i.e., diversifying risk was a key aspect. A pooling solution like a fund of funds approach can mitigate the risks otherwise found in this sector, like strategy risk, limited liquidity, problems with finding and accessing investments, and of course, the big one as of late, the need to avoid “bad actors”.
The Fund was characterized as a buy-and-hold investment with broad market exposure, and access to managers and positions an investor might not otherwise have, or even know where/how to look for.
Clearly, there were those in the room that had gone through the ringer of what the crypto market has provided lately, and the Digital Fund was certainly appealing to those looking for more diversification than single large positions in this area. The Digital Fund was not spared the negative impact of the markets, but thanks to its diversification, also didn’t hit the dire straits of other singular positions in the digital asset’s realm.
For more information, go to www.altalphastrategies.com/digitalfund
Similar to the Digital Fund, the All-Weather Fund is a carefully selected and diversified portfolio of hedge funds, or a fund of hedge funds, although with the goal of providing moderate returns at low volatility along with consistent compounding. A conservative, diversified portfolio of best-in-class hedge funds, but the focus is more on investments with a low correlation to the traditional markets. It also provides access to hedge funds that might otherwise be inaccessible to non-UHNW investors.
It’s considered a buy-and-hold investment across varying market conditions and is a strategy BFI has been running already since 2018. Contrary to the Digital Fund, it does have exposure to funds that are time-tested and have been around for more than just a couple of years.
All said, clearly a great basis for building a solid portfolio around.
For more information, go to www.altalphastrategies.com/allweatherfund
AltAlpha Integrity Gold Fund
The Integrity Gold Fund is not like your run-of-the-mill, physically backed gold funds you’ve heard before. Here, the Fund will invest in 100gr, 500gr, and 1kg physical gold bars, with the bars coming from a well-known Swiss refinery with responsible and compliant sourcing. The bars created for the Fund will come from the recycling of bank-accredited gold bars in Switzerland and the UK, with the objective of CO₂-optimized production and delivery. And, using the technology of the Group’s technology firm, aXedras, will provide a tech-enabled transparent inventory where each bar can be viewed online, showing the bar’s individual make up and provenance.
And, if that wasn’t enough, what will set the Integrity Gold Fund in front of others is the fact that the gold bars will be redeemable in-kind, so that clients can actually access the bars they are invested in.
The Integrity Gold Fund stands to be one-of-a-kind in the realm of accessing gold spot price performance with safety and access never seen before in a similar fund. The story of gold’s role in a portfolio hasn’t changed, and is perhaps more important now than ever, making the Integrity Gold Fund’s launch critical for timing in what is to come.
For more information, go to www.altalphastrategies.com/goldfund
After the presentation of each of the Funds, a Question-and-Answer session was held to still cover any lingering questions the attendees had. What I found particularly interesting, not only from the Q&A but from the discussions that took place then immediately after the Briefing was done, was that all three of these Funds found major appeal amongst the diverse group in attendance.
Clearly, the crypto-currency and digital assets crowd have seen historical losses, but nearly all would agree that despite this major bump (or perhaps mountain) in the road, digital assets are here to stay and will find their way again. However, those investors and financial advisors that had only seen gains until late in 2021 now realize the importance of diversification, or insurance, in their portfolios.
And those of us, myself included, that are new to the digital asset space, I found the approach of a fund of funds, with access to more in the digital asset’s world than just cryptocurrencies, to be a good way to start “dipping the toe” into that world. Hand-picking investments in a world you are not used to can be daunting.
The same can be said of the All-Weather Fund: it’s tough enough to pick the individual positions that will form a good conservative foundation to your portfolio, but how much time to do you have to do the research yourself…and then make the calls if it’s time to adjust? A diversified, managed approach to investing in a way not directly correlated to how the general markets will move is just what the doctor ordered.
Finally, as the managing director of BFI Bullion, the precious metals arm of the BFI Capital Group, where we purchase and store physical metals outside of the banking system, you are probably wondering what I think of the Integrity Gold Fund. Well, if you’ve talked to me before, you know my stance was always owning physical metals directly is an insurance play for the long haul. But if you want to take advantage of the gold price and looking for an option where you can buy in and sell out quickly, then investing in a gold fund, especially one that really has physical backing, is yet another access to the precious metals’ world.
In conclusion, many in attendance agreed that with the myriad issues investors are increasingly facing, the major question for investors and advisors alike moving forward is “how do you invest?”. We all deal with that question. Clearly, all three Funds offer very different options in ways critical to investing in this New Era and represent how we are looking at the next several years of taking advantage of the opportunities given.
Through this all, and perhaps most importantly, the Funds represent ways that BFI is already investing not only our clients, but ourselves, as a business and as individuals. So, while the phrase was used frequently that we have “skin in the game”, in this case, that really is the case. Even for this American-Swiss.
I’m looking forward to the next Breakfast Briefing!