2020 saw a boom in first-time investors as many households in the US and UK substantially increased their savings and found they were stuck at home with more time on their hands.
Despite initial fears of impending economic destruction, the COVID-19 pandemic has had a positive financial impact for some. It encouraged people to save money and enforced a reduction in costs for most – working from home means less commuter train tickets, restaurant lunches, and boozy sessions with colleagues. It goes without saying that serious financial damage has also been caused by the pandemic – company closures, increasing unemployment rates – and we will only find out the true impact in the coming months and years. It is striking, nonetheless, that many have been able to save more money than they usually would.
The increase in household savings coincided with the growth in a number of fintech companies offering investment platforms available to consumers. This has opened up investment at the touch of the button. Platforms like Robin Hood are fast replacing traditional investment brokers due to their convenience and reduced fees. Crucially consumers are increasingly comfortable with the idea of making investments on their phone in an app. The pandemic has only sped up the digital transformation of banking and everyday financial management – this has made the migration to retail investment using technology a more natural step. Users are able to invest in shares and stock markets using these apps from the comfort of their own homes and without needing to phone or meet with a broker.
At Dot Investing, our passion is using technology to democratize access to the cream of the crop when it comes to investment opportunities. We have built an online investment platform that allows individuals to invest in top tier private and alternative asset funds, including private equity, VC, and hedge funds. Traditionally these funds were only available to institutions due to the high initial sums of money required to invest or to a small number of individuals who were industry insiders or who knew those who were.
Each investment opportunity listed on our platform has passed a proprietary due diligence process, combining technology and our in-house expertise. To qualify as an investor on the platform, users must meet certain criteria. This is to ensure that users have the necessary investment experience and profile before risking any money.
We provide the tools and expertise to take much of the legwork out of choosing private market investments, but ultimately users will make their own decisions on where to invest funds. However, when they do invest, they will be doing so with the knowledge that each opportunity presented has been vetted by experts. Our curated investment opportunities are predominantly focused on top tier private equity and alternative asset funds. We do also provide regular access to funds with a focus on having a positive environmental, social, or governance (ESG) impact as well as representing a financial gain. Interestingly these types of funds sometimes called “impact investment funds”, have shown strong financial performance versus both stock market index trackers and other funds that are setup purely for profit.
Investing in private markets can seem mysterious and opaque to those without much experience of it. We also see our role as educating and helping to spread knowledge of the opportunities alternative asset and private market investment can provide. It seems only fair when those in the know have been making strong returns on investment for decades. We see falling interest rates and volatile markets as increasing demand from individual investors for what we can offer – access to top-tier private assets and alternative funds. Currently, we are one of a small number of fintech platforms that provide the access and tools required to meet this demand. On the other side of the equation, we open the door for the funds we work with to an untapped pool of capital. We see ourselves as part of the next generation of investment platforms that will hopefully open up more options to individuals investors so that they can build better portfolios and achieve better gains. Increased financial gains provide more options, which can only be a good thing!
It is going to be exciting to see how other investment niches are opened up by fintech startups over the next few years. Also, to find out if new generations will have different approaches and appetites for investment as they get to the right age to begin on their investment journey. Already we can see the shift towards investment apps and ESG investments as being led by millennials and Gen Z.
Dot Investing is based in London, launched by a team with broad experience from a range of financial institutions, including Blackrock, Barclays, and JP Morgan.
Kinson Lo is the founder of Dot Investing, an online investment platform that connects individual investors to best-in-class private and alternative market opportunities.