Alteris LLC provides consulting services to those investors considering putting their capital to work in the sometimes ambiguous Alternative Investment (AI) asset class.
We have worked on a wide variety of types of projects though most are in private equity and venture capital. Some of these could be considered rather non-mainstream including complex derivatives, a mega farm in Brazil, and innovative technology start-ups in Africa among others. Though most have been located in the USA and Europe.
Alternative Investments as a category are defined differently by different people. Here is our attempt at it.
Generally, an Alternative Investment can be categorized as not being contained in one of the three traditional asset types – publicly traded stocks, bonds and cash. Alternative Investments often have the characteristics of a lack of liquidity, complexity and a lower regulatory profile. Investors may find AI vehicles attractive because of their low correlation with standard asset classes and potential returns greater than the market. Alteris recommends to its clients that they allocate only a small portion of their portfolios to AI due to the risk profile of many of these investment vehicles.
Our focus on advising in the Alternative Investments category is usually, but not exclusively, in the following areas:
Private Equity refers to illiquid debt and equity positions in privately held companies. Typically, these are existing businesses with ongoing revenues. Alteris provides an analysis of both the equity and debt securities contained in these transactions. Often, these investment opportunities contain so much cash flow uncertainty that the debt behavior in the short term is like that of equity. Besides senior debt, Alteris LLC analyzes mezzanine and distressed debt, which is a subset of this investment category. In addition to providing valuations on the various debt and equity instruments, Alteris LLC provides consulting services on the range of possible outcomes and possible business and investment strategies for these situations.
Venture Capital is usually meant to include equity or debt financing to start-up companies that do not have the track record, size, or preference to raise capital from traditional sources (banks, public markets, etc.). These are usually high-risk and illiquid investments in possibly unproven concepts in non-publicly traded companies. The goal is to eventually generate large returns by developing these enterprises into organizations capable of attracting public investment capital or through the sale of the business to other companies.
We have had the privilege of working with start-ups, early-stage companies, and entrepreneurs from around the country everywhere from Silicon Valley to Silicon Alley. We also have experience in Europe, the Middle East and Africa.
Hedge Funds may be the most visible category of Alternative Investments. A hedge fund is a privately organized investment vehicle that produces investment opportunities that are substantially different from traditional investments. This is possible because of the less regulated nature of hedge funds allowing their use of derivatives, leverage and other strategies. This investment category includes a wide variety of vehicles that are differentiated by the implemented investment strategy. Alteris LLC assists in both the evaluation of hedge funds for potential investors and in developing investment strategies and opportunities for the hedge funds themselves.
Commodities, but with an Alteris LLC specialized concentration in Oil & Gas. Commodities are homogeneous products available in large quantities. Investments in this area is often in the form of futures contracts. Alteris expertise focuses beyond futures contracts to direct investments in natural resource companies, (oil & gas) leases, and those businesses that support commodities industries including infrastructure. In that regard, our work on individual businesses may be similar to private equity analysis from the Alteris LLC perspective.
Structured Financial Instruments, such as derivatives including options, warrants, futures, CFDs (Contracts for Difference), and so on. These often involve investment structures containing a high level of mathematical complexity. Alteris LLC has partnered with Investments Analytic of Madison, WI to utilize their proprietary valuation methodology to provide valuations to these difficult-to-value investment vehicles.
Alteris LLC does have expertise in the analysis of international Alternative Investment categories, with most of our experience being in Europe, the Middle East, and Africa.
Real Assets are sometimes included in the realm of alternative investments. Alteris LLC does not concentrate in that area. Though we have handled a few projects in commercial real estate.
Alteris LLC clients include professional firms, hedge funds, private equity and venture capital firms, wealthy individuals and their investment advisors, family offices, NGOs, sovereign wealth funds, government agencies, local and national governments, and other institutions.
