PENSCO Launches Tech to Streamline Investment in Alts
PENSCO, an alternative asset custodian for self-directed individual retirement account investors, launched its new paperless deal funding technology—PENSCO Alt-Nav™. The technology was designed to help retirement investors and those trying to raise capital – including entrepreneurs, private fund managers or private businesses – work with individuals who would like to invest in non-traded alternative assets using their retirement accounts.
PENSCO Alt-Nav™ reportedly reduces the typical process of investing in alternative investments with an IRA from weeks to days, while delivering transparency, administrative accuracy and an intuitive user experience. The guided, web-based process includes drag/drop features for uploading investment documents and e-signature capabilities.
According to Pensco, there is currently more than $7.3 trillion held in IRAs and of that, the self-directed IRA market is estimated to custody about $146 billion. Since 2013, the IRA category has grown by 12 percent, while assets in self-directed IRAs have grown 21 percent, as investors increasingly look to diversify their retirement portfolios away from traditional stocks and bonds.
“Self-directed IRA investors can invest in a wide range of non-traded alternative assets, from real estate and private equity, to commodities and equity crowdfunding, however the administrative process has been onerous given every unique investment requires different documentation,” said Kelly Rodriques, CEO, PENSCO. “Given this, we saw an opportunity to be the first custodian to offer a solution for entrepreneurs and retirement investors that makes it as straightforward to make investments with alternative assets in an IRA as it is to buy stocks or bonds with your IRA. This is a win for IRA investors as well as for investment sponsors.”
While the first release of the technology primarily supports investments in private funds, LLCs, and LPs for individual investors, PENSCO is further developing the technology to support equity crowdfunding sites, peer to peer lenders, real estate, notes and other non-exchange traded investments with another release expected to launch in the near future.
Individual investors with a private placement opportunity can go directly to the company’s website and follow a step-by-step guided process to open, fund and invest in the program.
Capital raisers who work with PENSCO will receive a unique link to a portal where they can drag and drop the documents required to get their investment reviewed by PENSCO. Investors in their offering will then use the Alt-Nav™ technology to open and fund their account and electronically complete an investment authorization pre-populated with all the capital raiser’s deal information, eliminating the need for the investor to provide repetitive information and avoid the complexity of obtaining investment documents. They will simply review and affirm to fund the deal.
PENSCO Trust Company performs the duties of an independent retirement custodian that helps investors use their retirement account funds to invest in real estate, private equity and other non-exchange traded assets. As the custodian of more than $10 billion in assets on behalf of more than 45,000 clients, PENSCO works with financial institutions, capital raisers and financial advisors, as well as self-directed investors.