Traditionally, when speaking of alternatives, hedge funds come up. Today, however, there is the least amount of movement in this vertical. Todd Ryden, CEO of FNEX, says the most interesting space is in real estate, which can be direct investment from an equity standpoint or yield-based interest. Ryden is also seeing a lot of interest in secondaries, which is a marketplace where stock and large market companies trade. For example, before Facebook and LinkedIn went public, there was a robust marketplace for the trading of those private shares. There are quite a bit of companies that have some traction in that secondary space, Ryden says.
Education is something that FNEX focuses on because there's so much lacking the space, explains Ryden and for even for the most educated people, they don't know what alternatives mean for an investment strategy. How you access a true alternative investment to lower your volatility and give you a longer-term investment horizon is becoming harder to find and harder to educate yourself about them in terms of making a good investment strategy decision, he adds. One of the strategies used at FNEX is to partner with people who bring education to the table and to that end, utilize blogging, speaking publicly, webinars, white papers and collaborating and re-purposing other educational materials.
For Ryden, it would be hard to convince him that equities are highly volatile, given the tremendous boom this area has seen. When you're in a structure that's locked in, that a lot of hedge funds and private equity funds have, "it takes the emotion out of it and so you can't sell at the bottom," says Ryden and takes the flight scenario away. What he's seen as of late is the advent of liquid alternatives, which are alternative strategies that trade on an exchange, which he doesn't think will playout as intended because the attraction of some alternatives is that they are a liquid and takes the emotion out and takes into account the investment strategy over a longer period of time.
Todd Ryden is the CEO of FNEX, the first alternative investment marketplace providing a broad platform for investors to source a variety of private investments, such as private shares in companies, secondaries in well-known companies, hedge funds and basically everything that doesn't change on an exchange. Ryden spoke with Alternative Investing News providing online alternative investing video news content. Alternative Investing News is a featured network of Sequence Media Group. This video was brought to you by Vantage Self-Directed Retirement Plans.