Global Alternative Investment Management LLC (“Global Alts”) has announced the launch of FinTech Fund II which is available to Qualified Purchasers. The Fund’s investment objective is to opportunistically acquire a portfolio of companies and funds that seek to invest and profit from investments in financial technology. Such as software and digital services that improve efficiency and speed or decrease costs in the provision of financials services. The Fintech ecosystem includes services as insuretech, regtech, roboadvisory, banktech, digital lending, cybersecurity, digital signature, identity technologies, blockchain, machine learning, AI, and smartcontracts.
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FinTech Fund II has raised $1.9 million to date and has deployed initial capital into four investments: a diversified blockchain fund that seeks out venture equity along with early stage and established token investments, a blockchain enterprise focused on developing wireless infrastructure network, a growth equity fund investing in high performing fintech companies, and an automated digital Latam freight enterprise.
“The financial services industry is at a structural inflection point. We believe that the wave of unprecedented regulation and the proliferation of low-cost enabling technologies are providing the necessary catalysts for significant dislocation and democratization of market share,” says Prateek Mehrotra, Chief Investment Officer. In recent years, the fintech industry has innovated consumer and business applications at a rapid pace. “One of the biggest benefits of fintech is the competition it has introduced into the financial industry. With access to this innovative technology, customers now have an alternative to large organizations and banks, which usually are more expensive options.” Fintech has and will continue to be life-changing in terms of access, transparency, and convenience. We believe our lives are impacted at an increasing rate by disruptive technologies created by high-growth companies with innovative ideas that provide investors with unique opportunities.
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The market correction in public equity and crypto markets will also impact venture capital and private equity valuations. While public market investors feel the impact of downturns almost immediately the repercussions on private market assets are more complicated. Low interest rates for the past 14 years inflated valuations and investor appetite for more risk. Forced selling by investors that borrowed too heavily or have cash needs may create opportunities in the secondary market, while need for capital in a tightening funding market will cause companies to raise capital at lower prices than previous rounds. In any case, we see the current environment as one that will generate opportunities to acquire the next generation of fintech companies at better prices.
We intend that blockchain technology will make up a sizable portion of the portfolio. We believe blockchain technology enables a pioneering method for information to be shared; the use cases for a transparent, verifiable register of data transactions are endless. The blockchain has the potential to be a significant driver of value creation during our lifetime. The crypto and blockchain sector will continue to see volatility, but the market continues to mature, and with that more institutional and even retail investors are flocking the space. The increasing appetite in crypto should empower and drive start-ups producing a set of unique investment opportunities.
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