Democratizing Access to Alternative Investments with Perrin Quarshie

This is your host, Doug Heikkinen. And as many advisors and their clients are becoming more interested in alternative investments, forward thinking companies are striving to help. One of those is real blocks. Real blocks is a technology platform that connects advisors and investors to the best alternative alternative investment managers. What a match our guest today our Perrin Quarshie, who's the CEO of RealBlocks. Welcome, Perrin.

Perrin Quarshie  00:53

Thank you, Douglas. Good to be here.

Douglas Heikkinen  00:56

Great. So tell us a little bit about the genesis of real blocks. When did you all get together and realize that this was something that was not only a great idea, but was going to fill a big need?

Perrin Quarshie  01:09

We, as a firm at Real Blocks started about three years ago. And, you know, after that time, I had spent several years of my career in investment banking. And I ended up at Barclays, where I was excited about the fact that private real estate and alternative investment product was being democratized and was being created for retail distribution and distribution to smaller institutions. But I was disappointed by the fact that the distribution processes and infrastructure literally hadn't changed in the last 30 years, meaning that those products were even though they're being democratized. were being sold, you know, using paper documents, you know, in only specific geographies. And that they were still illiquid. So, you know, in the era of e commerce, when nearly anything we want can be bought online with a few clicks. I thought there was no reason why alternative investments couldn't also be distributable in this format. And so I took some research that I did when I was in grad school, where I was in Boston, and I met our founder, our co founder in Amman. And we decided that we wanted to combine our research and actually build out this platform that would be called real blocks that would actualize the distribution potential of being able to make alternatives available in an online cross geography cross channel format. So that's kind of the Genesis and then we Scott joined us shortly after, as our CEO with a 30 year career in distribution.

Douglas Heikkinen  04:13

How would you do find an alternative? And do you deal with all of them are just a subset?

Perrin Quarshie  04:18

of Yeah, so we did define an alternative investment as an investment that is not traded. So primarily, like private equity, private real estate, private credit or hedge funds, you know, as being some of the largest categories and how are you disrupting alternative investing? Sure, yeah. So basically, these alternatives have been available and have been utilized for a long time, at large endowments and at large family offices and large institutions, and have been used to really enhance returns and protect against volatility, but they have not been available to retail investors or to smaller institutions down market. And so you know, with real blocks, given that we've built the technology to make this available online, we can now make it cost effective for managers to go down market to the retail channel and to smaller institutions.

Douglas Heikkinen  05:18

Why does alternative investing need to be democratized? And what's the role that you guys are playing to increase the access?

Perrin Quarshie  05:26

Yeah. So it needs to be democratized. Because, you know, the use of alternatives, as shown by a lot of research done by many groups, like the defined contribution, real estate counsel and default, and a lot of industry groups, has been shown to increase the range of expected returns while reducing risk. So it's a very important tool for enhancing portfolio performance and enhancing the outcomes of the participants in a plan in a retirement plan. But so, you know, the the issue that has occurred, however, to date, has been that these tools have only been available to the largest institutions. And it hasn't been cost effective yet, to get them into the hands of retail investors, and smaller institutions. So these, you know, retail investors and smart solutions have been left out. And so that's why you know, real blocks is solving that problem with providing the technology so that those parties can now be included.

Douglas Heikkinen  06:27

Are financial advisors, understanding the opportunity they have now to access alternatives through people like you to give to their clients.

Perrin Quarshie  06:37

Yes, you know, great question. So, since we started, we actually had in our, in our press release, the most recent one, a financial advisor, who has for the longest time wanted to get their client into an odyssey fund of funds, you know, and they haven't been able to access it. So we were able to take, you know, for, you know, what is now our second largest client, which is a large, US asset manager with over, you know, 70 billion in a us. And we were able to create a custom, you know, index fund to funds products that an RA has been able to distribute to their clients. And they, you know, were included in our press release, with a quote that expressed how excited they were not only to get the product, but to get it in a format that was easily accessible and digestible for their clients and for their operations at their firm.

Douglas Heikkinen  07:34

Once the advisor gets that you can access these for their clients, is there ways where an advisor can talk to their end clients, the investors about these opportunities and how valuable they are to their portfolios?

Perrin Quarshie  07:49

Yes, there there is the functionality for that. So our platform has full data room, and it has all the marketing materials, it has all of the subscription materials. And so what happens is, many CIOs that are AAAS have been wanting to get their clients into alternative product for a long time. But as I mentioned before, they haven't been able to access it. So with real blocks, we can not only give them access, we can give the CIO a mechanism to have their individual representatives, their wealth managers educate their clients on the product, and put it into model portfolios that they have for the client, and do all of that within the confines of our platform.

Douglas Heikkinen  08:30

Your platform is is positioned for the present. What about the future? What about the future landscape? Where are you going?

Perrin Quarshie  08:36

Great question. So you know, as I mentioned before, most of the largest asset managers have previously only been distributing in the US. Because, you know, it's the sales process, the regulatory process, and these fund administration processes that they have are only suited for us clients. But as we know, the world is a big place, and it's a global place. And so the nice thing about real blocks is that we have full international connectivity, so that we can give these asset managers with a few clicks, access to an international customer base of retail and institutional clients. So being able to provide the plumbing or the piping, if you if you will, to give any manager access to a global footprint for distributing is something that hasn't existed until now. And we're proud to have built that technology and have it be being utilized by one of the largest and most successful asset managers in the us today.

Douglas Heikkinen  09:39

What I'm hearing is not only do you work with financial advisors, but you also work with asset managers and fund distributors.

Perrin Quarshie  09:47

That's correct.

Douglas Heikkinen  09:49

So tell me more about all that.

Perrin Quarshie  09:51

Sure. Absolutely. So the what Real Blocks is, is you can imagine us as the piping between an asset manager you know, me Be it GP asset manager and then their distribution team. So be it retail distribution. So bank trusts are IAS or wirehouses, or institutional distribution. So what happens is that for us clients, typically, you know, this is done through sales channels, you know, but real blocks is unique and that we can make the product available online. So that ramping up a sales team and setting up all the infrastructure is no longer necessary.

Douglas Heikkinen  10:33

Are you seeing a huge interest in alternatives in general?

Perrin Quarshie  10:38

Yes, we are actually. So you know, for one of our clients, which is one of the most successful asset managers in the real estate space, they previously had only us wire house distribution for one of their non traded REITs, which is a core real estate product. And they were able to use real blocks to provide for themselves the first time the opportunity to distribute this product abroad. And so you know, by having connected to our system, they were able to take their KPI for fundraising, and blow it out of the water by six x in one quarter. So the proof is literally in the numbers there. And our second client and third clients are on their way to similar success with our system.

Douglas Heikkinen  11:20

Are you positioned for the defined contribution market?

Perrin Quarshie  11:24

Yes, we are. So you know, the nice thing about real blocks is that, you know, it provides the sales functionality, meaning the onboarding, yeah, it provides the the fund or feeder fund functionality. And it also provides the secondary trading functionality. So you know, it's essentially a web based feeder fund platform with built in secondary trading. And that's uniquely beneficial for getting alternatives, and private equity, private equity, private real estate and private credit into the defined contribution market. So we actually have been working with one of the law firms that was actually that drafted that DLL letter that paved the way that was released on June 6, and paved the way for alternatives to be used and defined contribution plans mean at target date, target risk and collective trust. So as the firm has now gotten off to a great start with distribution of products, we are now working with several of the large asset managers and target date target risk fund managers, as well as consultants to be able to create defined contribution product. And then Scott Brooks on our team has also done a lot of work in this space.

Douglas Heikkinen  12:40

There's a lot there's a few of these popping up a few of people who do similar things to you guys. What's unique about Real Blocks, and how what's your value proposition to advisors and asset managers?

Perrin Quarshie  12:51

Absolutely. So while feeder funds are nothing new, nor is electronic document signature, I'm having a platform that allows for international cross channel distribution with built in secondary trading is unique and new. And that's what we do that all of the other platforms today don't offer.

Douglas Heikkinen  13:16

Where do you see real blocks in five years?

Perrin Quarshie  13:18

Sure. So we see Real Blocks as being the infrastructure meaning, the connectivity, the connective tissue that connects the world's largest and most successful asset managers, with a global team of distributors, meaning institutions like sovereign wealth funds, pension funds, endowments, as well as retail, meaning bank trusts, IRAs, and broker dealers. And so we see ourselves being the infrastructure that that not only provides access, which is one of the biggest problems, but also provides liquidity via our built in secondary trading functionality. So that's how we see ourselves getting to market and really establishing ourselves as the market leader by solving the access and liquidity issues.

Douglas Heikkinen  14:09

That was super interesting. We thank you so much for joining us today.

Perrin Quarshie  14:13

Oh, thank you, Douglas. It was great to be a part of this.

Douglas Heikkinen  14:18

If people want to reach out to you guys. How do they get contact with you?

Perrin Quarshie  14:23

Sure. So you know, they would can easily find us online at real blocks.com. And there's information there for asset managers, as well as for distributors. And there's contact us links in both that will allow people to reach out to our team and ask questions and get further detail. We can also be found on Twitter as well.

Douglas Heikkinen  14:45

Great. We really appreciate you joining us today.

Perrin Quarshie  14:48

Thank you very much. Great to be here.

Douglas Heikkinen  14:50

For everybody at Advisorpedia, our producer Jakie Beard and the power advice podcast team. This is Doug Heikkinen and please follow First latest updates on Twitter, LinkedIn, and Facebook at advisor pedia. Thank you.

SUMMARY KEYWORDS

clients, alternative, asset managers, advisor, distribution, product, defined contribution, fund, democratized, roblox, platform, blocks, meaning, alternative investments, distribute, team, scott brooks, access, institutions, retail investors