Will alternative investments become a staple in all investors’ portfolios? • ZebethMedia
We no longer live in the era of the 60/40 portfolio, VC says
A 60/40 investment portfolio, in which 60% is invested in stocks and 40% in bonds, was long considered classic. But that’s no longer the case, as many investors are now diversifying beyond publicly traded assets.
Alternative investments, or alts, are a direct corollary to diversified portfolios. And they are not just for institutional funds: Individual investors too are showing increasing interest in this asset class, which encompasses all sorts of supports, from wine and watches to gold … and startups.
Startups can be on the receiving end of investments into alts, but some of them have also facilitated this trend. California-based fintech VC firm Broadhaven Ventures invests in companies on the tech side of enabling alts, with a portfolio including Allocate, Alongside, Alt, Capital (known until recently as Party Round), Caplight, Carta, Latitud, Pipe, Republic, Syndicate and others.
Talking to ZebethMedia, Broadhaven co-founder and partner Michael Sidgmore said that when investing in the sector, the early-stage fund has “focused on helping to build out the alts ecosystem by investing in many of the enabling technologies across various areas of alternative investments.”
Sidgmore himself has spent a large part of his career in alts and launched a podcast and content platform called Alt Goes Mainstream in January 2021. We spoke with him about alts beyond crypto and what’s next for a space that’s seeing some of its tailwinds fade. His answers below were edited for length and clarity.
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