Altitude Club aims to build alternative investment products

Altitude Club, a Gurugram-based fintech startup, is on a mission to democratize access to alternative investment products for retail investors. The company, founded by Krishna Maggo in 2023, offers structured debt instruments that combine multiple alternative assets, such as farmland, real estate, invoice discounting, and inventory finance, to provide high-yield and low-risk returns.

Alternative investments are financial assets that do not fall into the conventional categories of stocks, bonds, and cash. They are typically less regulated, more illiquid, and have a low correlation to standard asset classes, meaning they do not necessarily move in the same direction as other assets when market conditions change. Alternative investments can include private equity, venture capital, hedge funds, commodities, cryptocurrencies, and collectibles.

According to Maggo, the idea behind Altitude Club was to create a kind of mutual fund for alternative assets, which would offer diversification, stability, and liquidity to investors. He said that post-COVID, traditional assets have proven inadequate for optimal returns, prompting a shift towards alternative investments, as highlighted in one of the recent KKR’s wealth reports. However, he also noted that there are many challenges in adopting alternative assets on a larger scale, such as perceived instability, security concerns, high minimum investments, and fee structures.

Altitude Club aims to build alternative investment products

To address these challenges, Altitude Club has developed a proprietary risk analysis and underwriting system, which evaluates the potential and performance of various alternative assets and bundles them into securitized debt instruments, acting like bonds. These instruments are then listed on the Bombay Stock Exchange, offering a competitive coupon rate and easy exit option to investors.

The company’s inaugural product, Prism, is a multi-asset securitized debt instrument, which consolidates 12 diverse alternative assets, including farmland, real estate, NCD, OCD, invoice discounting, and inventory finance. Prism offers a coupon rate of 18%, backed by brands with revenues up to over Rs 300 crore. Prism’s assets are secured by physical assets like real estate and machinery. Prism is set to launch for public investment soon.

Altitude Club initially targeted HNI and Ultra HNI investors, but is now expanding to include retail investors as well. The company aims to roll out a new structured debt instrument every week, catering to different sectors and themes. For instance, Altitude Club has recently launched Sustain X, a structured debt opportunity focusing on sustainable brands in the EV, solar, and renewable energy sector, with a Rs 20 crore issue size.

Altitude Club is not the only player in the alternative investment space in India. There are other platforms, such as Smallcase, Groww, and Kuvera, which offer access to alternative assets like digital gold, cryptocurrencies, and US stocks. However, Altitude Club claims to have a unique value proposition, as it creates its own products rather than aggregating existing ones. The company also claims to have a strong network of partners and advisors, including industry veterans, angel investors, and former regulators.

Altitude Club is looking to tap into the growing demand for alternative investments in India, which is expected to reach $23.21 trillion by 2026, up from an estimated $13.32 trillion in 2021. The company believes that alternative investments can offer a solution for a diversified portfolio, providing stable alpha returns with collateral-backed products.

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