Realto partnered with Axos Clearing to finalize their broker dealer applications and set themselves up as an “ATS” or alternative trading system.
“For our process of being able to clear and settle certain trades we needed to be able to have a partner that was a clearing broker and custodian,” Realto CEO Brian King told the 4thEst8. “Axos is a very well known name in this industry. Being able to partner with somebody with a great reputation like theirs is really important to us.”
What King and his team are setting up is a platform to broker the sale of things that are otherwise difficult to sell, loosely called ‘alternative investments’ – essentially any asset class EXCEPT stocks, bonds and cash. Tangible assets in this class include precious metals, rare wine, art and collectibles. Some financial assets like commodities, private equity, distressed securities, hedge funds, exchange funds, carbon credits, venture capital, non-fungible tokens, film production and real estate – collectively an $11 trillion global market, King says. He’d like to get into all of that but is starting by focusing on real estate securities.
“They’re generally considered to be illiquid until there’s some type of liquidity event – it’s asset is sold or it gets listed on an exchange or something along those lines,” King said. Buyers range from individuals to huge retirement funds – and they buy at different phases of real estate development from raw dirt to rented out apartment complexes. “There’s typically a little bit more risk on the early side so people like to do those types of deals early and often but once a property gets leased it gets stabilized and the impact of the investment changes.”
As the investment risk and reward potential changes, so to does the nature of the investor.
Realto started in June of 2020, is headquartered in Overland Park, KS, and has seven full time employees. King says the company raised $3.5 million from an unnamed New York firm and four Kansas City area investors. Pending approval of its broker-dealer application King says Realto should go live this fall. It’s also working with the Securities and Exchange Commission for approval to operate an ATS, also expected late in 2021.
Links:
Realto