Watch the full video of this panel discussion on Gamma Prime’s YouTube channel
Panel discussion with Shawn G. O’Keefe (Founder, Managing Director, and Chief Wealth Advisor at Summit Wealth Strategies), Palmer Antoine (Co-Founder & Director at Sparrow Capital), Michael Rosmer (Co-Founder of Investor.net), Evan Szu (Co-Founder & CEO at Gamma Prime), and Jake Claver (CEO & Principal at Digital Ascension Group)
The panel discussion delves into the evolving landscape of alternative investments, with a focus on digital assets and blockchain technology. Key speakers provide insights on wealth management strategies comprising traditional and alternative assets. They discuss regulatory clarity, market volatility, and the potential of blockchain technology and crypto-assets in transforming financial systems. The session highlights the need for strategic allocation in alternative investments, the importance of community-based investing, and the future outlook of blockchain as an underpinning for global financial transactions.
Evan Szu (Gamma Prime)
I’m Evan Szu. I’m not on the screen here, but I am one of the co-founders of Gamma Prime. So we’re hosts for today.
I’m also going to be moderating the panel. I thought maybe we could just start briefly with an introduction. Give me a sense for who you guys are. What do you do?
Shawn (Summit Wealth Strategies)
Shawn O’Keefe, Summit Wealth Strategies, Tax Strategies and Wealth Management. Today, we haven’t heard much said about taxes. So I’m excited to talk about.
Antoine (Sparrow Capital)
My name is Antoine Palmer with Sparrow Capital. I’m down here from Edmonton, Alberta. We provide homes for families.
We provide commercial spaces and co-work spaces for a whole community of entrepreneurs in Northern Alberta. We also have construction services and a whole network of integrated businesses and services to support our entrepreneurial community.
Michael (Investor.net)
I’m Michael Rosmer. I’m also with Gamma, but I do a lot of private investing, a lot of co-investing, and that’s with Sparrow. And so I’m here to talk a lot about alternative investing, I guess.
Jake (Digital Ascension Group)
Jake Claver, I’m the managing director for Digital Ascension Group. We are one of two multi-family offices here in the U.S. that specialize in digital assets and we provide a full scope of professional services. Sounds like I need to talk to this gentleman down here.
Evan
So you guys are the interface. You are where the investor meets the products, right? How do you guys think of alternative assets? What are some of the factors or considerations you have in terms of deciding, okay, should we look at securities, trots, bond, that sort of thing? Or should we reach into this other bucket, which is hedge funds, private equity, that sort of thing? Maybe we’ll start with you.
Jake
So we currently don’t do anything traditional. It’s completely digital asset focused with a hedge fund and we do make allocations to other private investments. The other side of the business, we have a syndication platform where we do end-to-end management for SPVs.
So again, all alternative investments, whether that’s real estate, private equity, M&A transactions, debts, bonds, warrants, all private credit. So I think that if you’re looking for asymmetric bets, then that’s the avenue you should go down. I think it definitely should be a portion of people’s portfolios.
But I think if you are looking at wealth management holistically, it’s probably not the lion’s share of it. If you’re looking for long-term wealth preservation, you probably have a significant allocation to traditional equities and bonds and stocks. But yeah, I mean, we see most of the family offices we consult with somewhere between 20% and 40% of their portfolio in alternatives.
Evan
That’s quite a bit. It’s larger than I would say. What would you say the other 40% or 60% is in?
Jake
Treasuries, mutual funds, things that are more of a bedrock, stable income, cash flowing. And then that other 40% is going to include real estate also. So when I say all, I’m including the real estate in that side.
Evan
Any comments?
Antoine
Yeah, I mean, everything we’re invested in is also alternative investments. For us, yield on our investments is kind of stable stakes for homogeneous basis of whatever we’re building. But what we’re really focused on is community-coordinated economic development.
So everything we invest in is local, it’s connected to community. We accept multiple layers of complexity in the ecosystem. So we find that where we have silos of functions in our portfolio, we’re dependent on third parties. Oftentimes, we don’t quite get the quality that we’re looking for to invest in our community. And then we’re really, really close to our investment. So these integrated functions allow us to add value and allow us to curate a community of competence in our region.
Evan
When you say community, do you mean geographic community or?
Antoine
Yeah, for the most part. I mean, there are stakeholders that come from other regions. We have investors from other regions, but like 75 or 80% of our investors are actually from Edmonton. They’re investing with us because they understand the impact of these investments in our community. They understand, they have some awareness of some of the leaders in our community, what they’re up to and how they all mutually benefit each other.
So yeah, our community is largely connected by geographic proximity.
Evan
Very interesting. And Sean?
Shawn
I’ve been in the wealth management business for about 40 years, a little over 40 years, and never been so excited about the opportunities in the market right now.
2017, I was introduced to this thing called Bitcoin. And I was very skeptical, as everybody is initially. And I just kept looking at it, studying it, and realized that I need to get in.
The problem with traditional finance is I couldn’t offer it to my clients. So obviously, the lack of regulatory clarity around investing in blockchain and crypto was way out there. So thankfully, now that we have gotten rid of Gary Gensler, there’s a lot more regulatory clarity.
How about that? But around the industry, and they were, I think, suppressing the opportunities that were out there. And I think that we need regulatory clarity to move forward and really advance blockchain, Web3, and crypto, all the things.
So I’m very excited. I’ve been, for about a year and a half, putting some portion of my client’s assets in blockchain, emerging technology, different things related to Web3.
Evan
I think Gary Gensler was famously asked, do you think we need more regulatory clarity? And his response was, we have regulatory clarity. We just do enforcement. Okay, so it’s whatever’s in your brain. Okay. Michael, any thoughts?
Michael
I mean, so for people who are not familiar, alternative assets is a pretty broad category of things out there that most people are not too exposed to. I think something really interesting is that probably the most successful endowment fund for a university is the Yale Endowment Fund. And they’ve averaged 20 some odd percent over multiple decades.
And he famously was putting more and more of the money into these alternative assets. And there’s a lot of group things that people kind of follow along that maybe is not necessarily the best, but it gives kind of this really alternative approach in terms of what’s going on with volatility in your other assets.
So for me, I invest in a lot of stuff. I have stocks, I have crypto, I have all this stuff. And I think to myself, well, hang on, markets are at all-time highs. Do I want to keep money there? It’s a little concerning. If I want to sell, do I want to hold cash? Oh, not really loving that either.
But if I have some alternative that I can go to that has high yield and stability, that’s really attractive. And so for me and my portfolio, it’s really important to go in there. Now, the issue with it is this is a super fractured market. I’ll tell people, oh, you know, we’re investing in hard money lending. They’re like, where do I find these deals? Well, you got to go look for them. And that’s a big problem. So bringing these assets together in some way that are as easily accessible, I think there’s a ton of people who, when I go out and I talk to friends and clients and co-investors, they’re interested in investing in these things. But locating those deals is a big problem.
Evan
It’s a super fractured market. I mean, how many people here would know where to go to find a half dozen hedge funds? If you’re just like, I’m going to go and invest. Maybe he’s got, is it a good idea? I don’t know where to go. There’s no place for it. It becomes something where it’s often word of mouth. Refer their friends, right? They’ll say, oh, this one’s doing pretty well. But certainly there’s no market for it.
So Michael, you touched on something which I’d also like to hear Antoine and your thoughts as well on market concentration, right? So we have U.S. equities all-time highs. Does that concern you at all? Do you even look at that? Is that a factor? Or if it is, what are you doing?
Antoine
It does. It does concern me. I wouldn’t invest in a company on the basis of 30 years of earnings. There’s just giant piles of money. From our perspective, part of the problem we have is there’s actually too much money. And what happens when a fund gets to a place, just like a tipping point where at the front end of a fund, the few years you’re running around looking for money, and then if you actually build a good product and run a fund for a few years and produce a yield, then it tips over.
And immediately, the problem is there’s just too much money. Where do you put it all? And so there’s just these giant piles of money that are coming in through retail channels. And it’s all being abstracted to Wall Street. And then you have somebody making decisions about where… And then it has to filter its way back down to the ground floor where people actually live and work.
And that is just a giant inefficient abstraction. It’s analogous in some ways to how governments become inefficient because of massive scale. And so I look at public markets, and I look at speculation on stock prices. To me, it’s… Of course, you can find opportunities in certain companies if you have good intelligence. But to me, it’s like this giant abstracted concentration of wealth that’s really trying to find money, trying to find places to invest. And you just feel a lot more comfortable being close to where money goes.
Evan
It makes sense. I think we know many hedge fund people like in Gamma Prime. One of the things they say is, look, the incentives push us towards stocks, right?
We want to get to a billion dollars, and then we get the two part of the two and 20. And then that’s a steady income. That’s no risk.
And the flip side is then the incentive is to yield, right? It’s essentially to be like, get as big as you can, get as bloated fat as you could possibly can. And that’s not necessarily in line with the goal of the investors, right?
Shawn
Yeah. So everybody, when the markets are at all-time highs, it’s going to implode at some point, and it will implode. It’s just how you’re prepared.
What is your diversification in your portfolio from risk-off assets to risk-on assets such as crypto and blockchain? So the volatility in the market is what creates the opportunity. So right now, by the way, blockchain, Bitcoin, crypto is on sale today.
I think about it. That 108,000 not long ago. Now it’s down under 90,000. So it’s a great opportunity to buy more at a discount. Because is it going to stay there? No.
So it’s just setting the expectations of the investor. What I see frequently having worked with most of my investors are retired or close to retirement, and they don’t understand volatility. A lot of times what I see is that they say, OK, blockchain, Bitcoin, it’s very risky.
Well, it’s very volatile. Is it risky? Is it going to go away? That’s what I like to say. Is it going away? I would say not. It’s here to stay. So the volatility is what creates the opportunity.
What I tell my investors is don’t call me up when the market drops 50% unless you’re going to buy more. Don’t call me up to complain. So if you want to buy more, give me a call. I’ll be happy to talk to you. Or I’ll talk to you off the ledge. That would be the other region. But there’s a lot of opportunity here today.
And I’m excited to be part of this. And thank you, Gamma Prime, for allowing me to be a part of it.
Evan
Shawn, I’ve had the same conversation with people. I’m like, if you’re calling me at the top, it should be to sell. If things are really high and you’re calling me in a panic on the downside, that’s why you’re not managing your money.
Because your psychology is that in the moment of greatest pain, you want out. You want to get loose. That’s why your finger is not on the button. Because you’re going to end up making the worst possible choice. Any thoughts?
Jake
Yeah. So I am concerned with where markets are. And I think you’re already starting to see some people get out of their positions.
And not for the reasons that a lot of people are concerned about. So you saw Nvidia fall, and they blame that on DeepSeek. And then you saw the market continue down a little bit. And they were like, oh, it’s the tariffs. I don’t…
Michael
It was actually that Jim Cramer said it was going to go up, right?
Jake
Dammit, Jim. So reverse Cramer. It’s 100%.
So I think the actual underlying cause of some of the frictions in the market currently, and that the rest that we’re starting to see, is actually going to unwind the first carry trade in Japan. So for people that may not be familiar with that, there’s been tens of trillions of dollars borrowed from Japan, from the Bank of Japan in yen, at almost zero interest rates over the last couple of decades. And as their interest rates have started to come up, the Bank of Japan started the hike aggressively last year, and we saw 13% down on the S&P on August 5th. That was the beginning of the unwind.
And they were like, oh, we’re going to pause here. As long as there’s market volatility, we won’t raise rates.
Well, they’ve started to raise again. And as of yesterday, it looks to me like they’ve started yield curve control on their bonds. So that’s not a good sign.
So yeah, definitely hedged against volatility in the stock market. And again, that’s why you want the diversification and non-correlated asset classes. I don’t think anybody’s going to be able to escape this one though.
I think when this goes, all markets are going to be red, including gold, commodities, stocks. Everything’s going to take a hit, because it’s going to be all that liquidity being sucked out of the market to repay those loans in a very short period of time. And I put out a theory about this a little over a year ago, where blockchain and digital assets end up actually saving the day on this.
And I’ve literally built my entire portfolio and strategy around it. So I do think there are going to be winners in blockchain, but I do think we’re facing some pretty volatile times here in the short term.
Evan
Let’s talk specifically about crypto as an asset class. Michael, I wanted to start with you to say, what are some of the sensitivities around crypto for traditional investors? You know many of these, you’re pretty comfortable with this yourself, but what do you see other people be concerned about? What do you think is needed for them to get comfortable?
Michael
It’s a very good question. I think there’s a lot of noise out there around crypto, and that makes it a little bit difficult to navigate. So let’s just start with the Jamie Dimon, essentially, hey, listen, there’s no value there, right? So that’s probably the first thing that is concerning. It’s just like, how do I value this thing? It’s a hard thing to understand.
Now, I think that the SEC has done a terrible job, because they’ve basically come out and said, hey, listen, if you want to give value back to token holders, you’re in security and we’re going to screw you. And so, you know, it’s like, do you want to just force people to be screwed or do you want to? So I think that’s one thing.
I do think that there have been security issues with like people are worried about their assets being lost. There’s obviously hacks and scams. We just had this big thing with Bybit the other day, $1.5 billion or so that was stolen there. So I think those are some of the things that are concerns for people. I think the volatility concerns a bunch of people. But I do think that bringing in these alternative methods of investing in these types of assets, such as the ETFs, Michael Saylor has gone a long way with MicroStrategy stock as well.
There’s all sorts of great institutional custody solutions now, so you can have your money on Copper Clear Loop or something and not have exposure to the exchange risk. There’s a bunch of this stuff that I think is helping to ease away a lot of those concerns. And then there’s an education component.
I tend to hold the view that what we’ve seen in the market over the last year or so has been a high degree of dispersion. So essentially, if you think about the price of assets, what you should imagine is that the supply of money divided by the supply of assets equals the price of those assets, obviously with concentrations in various places. And the problem in Web3 has been it’s too easy to create tokens.
Whereas if you look at something like, why does the S&P 500 tend to go up? Well, the SEC makes it hard to take companies public. And so a large amount of money tends to go into a relatively small number of assets.
So I think that what you may see on the back end of this is you have a regulatory environment that allows you to now deliver value to people who hold tokens, etc. And you will see a rotation into things that are actually productive, that actually add value, that actually have revenue streams, etc. And I think that may help with the narrative quite a bit.
Evan
Jake, any thoughts?
Jake
So just general oppositions by most people before investing. Yeah.
So we talk with a lot of high net worth individuals, family offices and others. And most of the time in the conversation, they’re very skeptical, as they should be, right? And I think we all were when we got started.
But once you do the research and you see that this is going to be around, I hearken it to like 1994, 1995, right? There was this burgeoning technology called the internet and people did not know what it was going to be. But if you had .com at the end of your company, I don’t know if you guys remember pets.com, but take it public and make a bunch of money and raise a bunch of capital. And I think that’s where we’re at. We’re in the speculative phase of this. We don’t know which ones are specifically going to be the winners, but you can kind of tease that out if you’re willing to do the research.
And so that’s what we advise our clients on. And we say, look, if you are a billionaire, sent a millionaire, even if you just have some extra money, don’t bet the farm on this, right? But if you have a small allocation, this is an asymmetric bet.
And some of these assets are going to go 20, 50, 100, 1,000 X if you’re in the right ones. And that could completely change your wealth over the long term. So just an asymmetric bet, maybe somewhere between half a percent and 5% of your portfolio makes sense.
5% is probably on the high side. But if you have, you know, 1% in the market and it goes 100 X, you just doubled your net worth. And so that’s the conversation we tend to have with people.
And, you know, again, we kind of advise them on which assets they should be purchasing with the RA.
Evan
In some ways, the skepticism is why there’s still asymmetry.
Jake
100%. Right. My quote is, when your grandmother can do it, the money’s been made.
Evam
Shawn, I wonder your thoughts with your clients.
Shawn
Yeah. Crypto, again, most of the people I deal with are older. They’re like crypto.
When I first started talking to them, they go, I go, you might hate it. You don’t know anything about it. But over time, you might like to learn about it.
So it’s an educational process. Even Michael Saylor five years ago was a skeptic of Bitcoin. And now he’s the maximalist.
But so yeah, I think that as you stated, you allocate some portion, you know, if it goes 1% or 5% into somebody’s portfolio, if it’s 100 Xs, you know, you’ve doubled or tripled or quadrupled the portfolio, which makes a lot of people happy, not without a significant amount of volatility. There is, you’re going to have to ride through market corrections, which we’re anticipating now. One other thing I’d like to add, because nobody’s really talked about it, is they talked about liquidating assets.
There’s a consequence. It’s called taxes. Does anybody here like paying taxes? Let me see your hands. Yeah. So I’ve been using this tax deferral strategy on highly appreciated assets since 2018.
It’s been around for over 25 years. So real estate, crypto, people are reluctant to sell assets because of the tax consequence. Well, I have a solution.
I have a solution where you can defer just like an IRA, you can defer it. And then tax engineer when you want to use that money for buying a house or a Lamborghini or whatever you want to buy, you know, I’m joking. Why not? Lamborghini.
But tax solutions, that is a big part of my practice is tax strategies and with the wealth management piece, adding in some alternative solutions.
Evan
Taxes is a serious concern, right? Because it’s also asymmetric for the government. You win, they take a shot. You lose, your maximum was $2,000 deduction you can make every year or something like that. So yeah, it’s an important component. Antoine, any thoughts?
Antoine
Well, you know, we’re a little old school and we just invest on the basis of fundamentals. Everything we do is fundamentally valuable. And, you know, for us, economic fundamentals means kids need to eat.
You know, we live in Northern Canada. It gets like minus 30 Celsius. I don’t even know what that is in Fahrenheit. Actually, it’s the same. Yeah, it’s where we meet. It’s where Fahrenheit and Celsius meet is 40, isn’t it? Minus 38, I think is where we meet. It gets cold. And so there’s winter, you know, and we’ve got buildings.
And the winter wants to get into your buildings. And like keeping the winter out of your buildings is economic fundamentals. Otherwise, we die.
And, you know, we have a lot of our investors coming from backgrounds from like Saskatchewan. They’re farmers, you know, and these people are like fundamental people. They just, they have like, for them, it’s like cows and chickens.
And so like for us, like it’s the moment of value. We sit in front like we have hundreds of apartments and these are people’s homes. This is a sacred place.
And there’s this moment where our team is interacting with these people and their needs in their homes, their needs for their families. And it’s like, how can we serve them? That’s fundamental value.
So when I think about cryptocurrencies and the blockchain, we’re not really interested in the currency part, except to the extent that there’s a currency that actually represents goods and services that can be purchased with those currencies in a market. And we’re interested in the blockchain because it can be a really powerful platform to create value. But where there’s this speculation is a bit alarming to me in the currencies themselves.
And so, yeah, this is kind of how we are orienting in this world.
Evan
Guys, we’re almost out of time. I’m going to do this thing, which I hate when I say on newscast, which is in 30 seconds, I’m going to just go briefly down. Tell me about what you see in the future going out.
Shawn
And I see the future is bright. I think there’s so much opportunity in this space, but you have to do it cautiously and educate along the way.
Antoine
What I see in the future is we’ve got old, brutal structures and how we communicate as human beings or how we coordinate as human beings. And that needs to change. We need responsive, adaptive. We need governance that is more distributed. We need intelligence at a more granular level that connects to the community, that connects to the land. And there’s a lot of developments that are encouraging in that regard.
Michael
I think part of my view of the future is that we’re moving from this unipolar world to a multipolar world. We’re getting kind of this fracturing. You can kind of see this right now between the US and the EU and kind of the speech going on there.
And I think that in spite of that, there is a greater need than ever for coordination. And so in a future world where you have all these different fractured perspectives, the connective tissue that enables transaction and coordination and commerce is exponentially more important. And so I think that’s going to just rise and rise in value over the coming decades.
Jake
I don’t know how to follow that one up. That’s pretty good. I think that they’re going to see a significant transition from traditional means of transacting value over to this technology and it’s going to revolutionize the way value moves across the globe and intermediaries, governments, institutions, enterprises, and people won’t even realize they’re using it. You will use your debit card or your bank account, and that money will just settle faster and you’ll get paid faster and there will be cleaner, more transparent ways of transacting where there aren’t middlemen that are taking a bunch of fees or causing frictions in transactions. And that’ll happen first in finances and then across all of the other industries over the next five or 10 years.
Evan
Beautiful. Thank you guys for your view from the ground. Appreciate it.
