We’ve been hard at work continuing to bring value to Gridline members, and we’re excited to partner with Millennium Trust to provide the ability to invest their retirement accounts into Gridline’s Thematic Portfolios.
While there is no legal distinction between a “traditional IRA” and a “self-directed IRA,” most custodian platforms don’t allow investments in non-public securities. Through our partnership with Millennium Trust, Gridline members have the flexibility to invest their IRA in alternative assets designed to reduce volatility and increase returns.
Traditionally, two common concerns when investing in alternatives are that they have long lock-ups and high minimums, and being able to invest from a retirement account can help mitigate both – Here’s how:
- Many people consider their retirement accounts an untouchable pool of capital they won’t rely on for many years (must be 59.5 to withdraw from an IRA without penalty). When looking over a 20 to 30-year time horizon, the duration of 10 years for many alternative funds can be seen as an opportunity to compound returns across multiple fund cycles.
- Although Gridline makes minimum investments more accessible, for most people, retirement accounts make up a considerable proportion of their assets (IRAs held $13.9 trillion in assets at the end of 2021). Investing from a retirement account enables you to keep a savings account in case you need it while being able to capitalize on the outperformance generated by top fund managers.
It is more important than ever to diversify past the traditional 60/40 model on which target-date funds are built. Our members can now leverage a self-directed IRA to invest in alternative assets like top-performing institutional investors.
If you are interested in learning more, I’d love to chat. Feel free to reach out or book a time.
-Logan Henderson, Founder and CEO
Worth a Read
Investing in VC to Survive Recessions
The adage is true: when everyone panics, that’s usually the best time to buy. And that’s exactly what VCs are doing. Read more.
The Often Overlooked Strengths of Smaller Funds
Smaller funds have several inherent advantages that make them more attractive investments, borne out in their returns. Read more.
A Final Thought
Campden Wealth and SVB recently released their 2022 Family Office Report. Key takeaways:
- Family offices expect to continue to invest in VC despite macro concerns in 2022. As of the end of Q2 2022, $276 billion was invested in VC deals globally, slower than the pace in 2021 but still more than double the average pace of the preceding nine years.
- 73% of US-based family offices expected their highest returns from emerging managers, and 80% are interested in growing exposure to sector-focused and thesis-driven funds, often lead by breakout or emerging managers.
Early in their maturity model, family offices begin investing through funds of funds, which pool access constrained funds to deliver instant diversification. The report notes that the average minimum investment in a VC fund of funds is $1 to $5 million.
An investment in a Gridline’s Portfolio fund allows investors to build a family office-style portfolio of top-performing access-constrained funds for $100k, a fraction of the typical minimum investment.
Let us know what you think – please don’t hesitate to reach out.
-The Team at Gridline