New Online Marketplace Opens Access to Alternative Investments

FNEX has launched an online marketplace for alternative investments in the U.S. that allows both investors and funds to reach each other and connects to alternative asset custodians to complete transactions.

The platform is available to accredited investors, family offices and institutions and allows these investors to source opportunities for a variety of alternative investments, such as placements in private companies, hedge funds and managed futures.

“What we’re trying to do is centralize issuance in one location for the benefit of investors to source opportunities,” says Todd Ryden, CEO of FNEX.

“The marketplace for alternative investments and private placements used to be about who you know, and sourcing opportunities were difficult and ad hoc,” adds Ryden. “We have eliminated that issue and created an environment where accredited investors can focus their time on evaluating a deal, instead of trying to simply find an opportunity.”

Funds can list on FNEX.com either directly or through an investment bank. If an introduction to an investor is made through an investment bank, the fund pays a referral fee to the bank, and if the fund lists directly, they pay FNEX an annual fee for Software as a Service (SaaS) after the first successful introduction.

To facilitate these introductions, listings can be set up to target specific investors. “The way our platform is built is that an issuer can actually define what segment they want their issuance exposed to. So if I’m a fund, but I’m only interested in institutional investors, we can have it appear on the platform only to those institutional investors,” explains Ryden.

For investors, the website is free to use. If an investor finds an opportunity they would like to invest in, they can use FNEX’s tools to complete the transaction. FNEX partners with StillPoint Capital, a broker-dealer that can make the actual deal, and the site can also link investors to an alternative asset custodian.

“So on the platform an investor can actually go in the ‘Deal Room,’ they can get all the documentation to the issuer (subscription agreement, etc.), upload all that documentation, and then actually go through a portal [where] they can access the Buy Direct letter from their custodian.”

The platform has been in development for approximately 18 months before going live today. Ryden says he is not quite sure why the alternative investment industry has been somewhat closed-off, but he thinks now is the right time for open access.

“Maybe we’re finally at a place from a technology standpoint, from a regulatory standpoint and a market standpoint, where attraction into alternatives has reached such a level. That’s where the flow of money is going; that’s where the large increase in the market is occurring, and so I think people are very interested in a centralized sourcing tool.”