Bite Investments is a U.K.-based investment platform designed to make alternative investing more accessible to the high net worth retail market via private markets tech solutions.
Sean Clifford said that what attracted him was the intersection of financial technology with the alternative sector, which he thinks is overdue for change. Clifford, CFA, joined Bite in New York as president of its Americas operation last month.
“The alternative investment sector is one of the few areas of the financial services industry that’s pretty much the same as it was 20 years ago,” he said. “For so long, so much of alternative investing was driven by institutional investors and, in the retail sector, advisors who had connections.” The paperwork involved in managing retail investors can be eliminated by technology, which can also aggregate smaller investors into large inflows for managers.
Over the last 25 years, institutional investors have tilted toward alternatives, but retail investors have had limited access. Even individuals with considerable net worth have been shut out. Clifford said that accredited investors have less than 5% allocated to alternatives now, indicating enormous potential.
“There’s no reason for the low number other than access,” he said. “When you lower the minimums to access these funds, you can effectively diversify across private credit, private equity, and private real estate.”
Clifford thinks that those three alternative sectors will be especially strong in the coming year. “We have very strong interest both from investors and GPs in private market strategies including private credit and private equity,” he said, “in large part because of a sense that recent strong public market performance may not be sustainable. The market is so big that it is still an enormous opportunity for accredited investors.”
To access the money held by retail customers, Clifford said that GPs will need to digitize to reduce the costs of onboarding and ongoing service. Although smaller fund managers would benefit more from adding an investor platform, Clifford said that medium and large managers seem more willing to invest in technology.
Bite entered the U.S. market in 2020; it already had a presence in Hong Kong, Singapore, and London. The firm plans to hire 10 to 15 people for the New York office in 2022. To fund the expansion, it closed a pre-series A round in the first half of 2021 and hopes to close a series A round in the mid-2022.