Propellr, an investment firm specialising in alternative assets, has launched its digital platform to help accredited investors access institutional-level opportunities.
"We're taking the kind of private placement deals usually found in hedge funds and making those deals available to the public," says Propellr CEO Todd Lippiatt. "If they're good enough for big institutional investors, why shouldn't a wider swath of investors also benefit? Every investor should have access to deals that provide healthy returns."
Propellr enters the investment crowdfunding market with USD6m in commercial real estate structured debt offerings.
Aristone Realty Capital (ARC), a New York-based private commercial real estate lender that has originated over USD225m in structured credit investments, is responsible for sourcing, analysing, structuring and actively managing all deals for Propellr's first vertical.
Lippiatt, who also serves as managing principal of ARC, brings Wall Street expertise in extracting value from large and complex real estate projects. Prior to founding ARC in 2006, Lippiatt was vice president of adjustable rate mortgage at Credit Suisse, Morgan Stanley and, subsequently, Donaldson, Lufkin and Jenrette (now Credit Suisse). Under Lippiatt's leadership over the last seven years, Propellr's first-to-market vertical has provided healthy returns in comparison with other asset classes.
Propellr plans to build on this model, offering alternative asset investments in other industry sectors within the next six to 12 months. The platform architecture was designed and built by a team of experienced start-up engineers and entrepreneurs who bring smart technology solutions made exclusively for today's investors in a heavily regulated and changing industry.
"It's simple, powerful and intuitive so investors can spend more time considering high-quality opportunities and less time worrying about whether a deal has been rigorously vetted," says Saadiq Rodgers-King, head of product development at Propellr and co-founder of Hot Potato, a social activity platform acquired by Facebook in 2010.
Unlike traditional brokerage houses and investment firms, who are in the business of selling, and unlike the vast majority of crowdfunding platforms, who lack the financial services expertise to do more than operate as passive electronic bulletin boards, Propellr actively helps people invest alongside seasoned professionals. The firm does this by breaking from several long-accepted industry norms in its approach and methodology.
• All deals are sourced internally, not through a third-party matchmaker
• Layers of fees and commissions typically paid to middle men are eliminated in order to pass those savings directly to investors
• Interests are overly aligned between firm management and its investors; Propellr invests a minimum of 10 per cent in every deal
"We treat investors' money like our own because, frankly, it is. We buy right alongside our investors and put our own money into every deal. That's virtually unheard of with traditional investing and with today's crowdfunding platforms. When there's shared skin in the game, it creates the right conditions to propel wealth-building opportunities for everyone," says Lippiatt.