AltX Aims To Improve Hedge Fund Cap Intro

Feb 13 2015 | 11:46am ET

One of the biggest challenges for hedge fund managers is raising capital. The process used to be based on personal introductions, often from prime brokers, but technology is changing that. AltX aims to become the leader in providing analytics to help make the process of hedge fund selection easier.

Name: AltX
Sector: Institutional Investment
Year formed: 2012
No. of employees: 50
Stage: Just closed $20 million Series B round in November, 2014
Notable investors: Series B: Wells Fargo, Carlos Slim, David Bonderman; Series A: Jeff Ubben

Pitch: We are a leading data analytics platform and marketplace for capital introduction in the alternative asset class industry. We combine unique data and superior analytics, proprietary behavioral finance insights and social discovery/due diligence capabilities in one aggregated, cost-effective platform.  We create insights.  Insights drive better investment decisions.

Tell us a bit about your company and what it does?

We have taken a uniquely scientific approach to try to solve the inherent problem associated with allocators’ search, diligence and monitoring of alternative investments within the capital allocation process.

As we overlay traditional financial analytics with behavioral science and social network mapping, we drive deeper insights that were previously unattainable when these functionalities were kept separate.

AltX uses innovative algorithms to identify statistical compatibility between funds and investors, which is underpinned through a best in class data environment. Benefits include: Time and money savings; comprehensive qualitative and quantitative data; cutting edge analytics; behavioral tools that provide insight into both an investor and fund’s investment styles and preferences; behavioral and financial/statistical dimensions that identify compatibility between funds and investors (focuses the selection process); hedge fund peer analysis; and due diligence through real-time, customized news feed
network relationship/social media mapping.

What is your revenue model? How will the company make money?

[We have a] two sided subscription model: both hedge funds and allocators pay with the latter paying the bulk of the fee.

[We will also have] capital introduction revenue. Through a wholly owned broker-dealer subsidiary, the company has the ability to charge transaction fees.

Who is your target market? How big is the opportunity?

[Our target is the] $6 trillion hedge fund market. As we scale the business model into mutual funds, private equity and real estate – this is a $36 trillion market.

Why are you and your team capable of succeeding?

Our CEO, Sam Hocking has 25 years Wall Street experience, spending the majority of that time at two of the world’s largest banks, primarily in senior prime brokerage roles. The rest of our team is comprised of data and behavioral scientists, additional Wall Street veterans, top tier Silicon Valley product and engineering experts, consumer marketing and customer experience professionals. Sam’s experience provides AltX with unique and highly valuable access to alternative market decision makers.

What is your company’s next target/milestone?

Gaining critical mass in the market to become a central part of the ecosystem.

Can you tell us one unusual fact about your company?

The company was named iMatchative to underscore our unique approach to the marketplace. Our use of advanced technology, algorithms and behavioral science optimizes human decision-making.

Our COO, John Attwell has a banner on the wall of his office with the first version of the AltX logo on it.  The first logo was created in 24 hours via a crowd sourcing resource with over 500,000 participants and cost of $250.

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