After a rocky year for stocks and bonds in 2022, it is no surprise that investors have been flocking to alternative investment opportunities to diversify their portfolios. And that trend doesn’t seem to be waning. In fact, a recent PwC report suggests that alternative asset classes – like real assets, private equity, and private debt – will more than double in size over the next two years, reaching $21.1 trillion (15% of global assets under management).
That growth has been good news for a number of local FinTech and WealthTech startups in the Southeast. And to capture some of that momentum, two of those startups, Arkansas-based AcreTrader and Georgia-based Gridline, started a new collaboration earlier this summer to help investors with asset diversification. This collaboration will help registered investment advisors (RIAs), family offices, and individuals invest in US farms and timberland in a more approachable way, enhancing the community for alternative assets.
“Gridline has wanted to expand its offering within the real assets vertical since inception. We started by providing our members with best in class private equity, venture capital, and private credit investment opportunities. Real assets was the natural next step in positioning Gridline as a one-stop solution for private market investing, and we viewed farmland and timberland as subsectors uniquely well positioned to generate compelling returns and cash yield during periods of economic uncertainty,” Gridline’s founder and CEO Logan Henderson told Hypepotamus. “Farmland and timberland have demonstrated low correlation to other asset classes and performed extremely well during periods of high inflation, two investment characteristics our members had been actively seeking.”
This is the first type of partnership for Gridline, a venture-backed startup that launched in 2020 as a digital wealth platform for alternative investments. But Henderson said that more such partnerships with “like-minded firms” could be on the horizon.
Henderson said that the Gridline team was “already aware of [AcreTrader’s] exceptional investment performance in the space and noticed that they shared our vision for leveraging technology to streamline the private market investing process, so we quickly began discussing potential partnership opportunities.”
Some of AcreTrader’s early investments have helped farms transition to clean energy or organic production. Other investments have helped farmers increase the size of their fields. Carter Malloy, Founder and CEO of AcreTrader, called the collaboration a “natural step forward” for the venture-backed startup that has raised a $20 million Series B in March of 2022.
“One of the benefits of alternatives is that they tend to be more stable through times of market volatility than publicly traded stocks and bonds, so from the perspective of our investors they’ve been less impacted by the volatility of the past year than most,” he added. “We have been able to take advantage of a lower valuation environment for equities and higher interest rate environment for credit to invest in managers who are seeing a more target-rich environment than they’ve had for some time. We launched our Private Credit portfolio early this year in response to the moment and have only seen more compelling lending opportunities surface following the failures of SVB and First Republic.”
