Would You Invest Your IRA Funds into MCAs?

A partnership between Supervest and Alto Solutions will bring in an unprecedented opportunity for investors, as the two groups will come together to allow IRA investors a chance to put their money in MCA funding. Account holders with Alto will be able to divide their money on a fractional basis to a diverse set of investments on the Supervest interface.

“We expect these alternative investments to be very popular given the meaningful diversification they can provide to individual retirement portfolios in addition to being yield-generating and short-duration products,” Alto’s Chief Revenue Officer Tara Fung told deBanked on Tuesday. “We will continue adding to our platform so that clients have more options to invest in alternative assets that further diversify and grow their retirement portfolios.”

Alto has made a business model out of using IRA funds for unique alternative investments. Crypto investments are another option listed on their website.

Supervest is no stranger to incorporating new business ideas, either. Their business model is based on connecting investors to inaccessible classes of assets, like MCAs for example.

John Donahue, the Chief Investment Officer with Supervest, spoke with deBanked on Wednesday about the opportunity it gives IRA account holders. “It’s the opportunity for any accredited investor to now be able to access the Supervest platform of fractionalized participation in MCA deals through their self-directed IRA,” Donahue said.

MCAs can be inherently riskier than a typical lukewarm investment portfolio, but the IRA concept is basically detached from the selected risk profile therein.

“The IRA is strictly a structure,” said Donahue, when asked about the inherent risks of MCA investments with IRA money. “It really doesn’t have a connotation of conservative or aggressive nature. You can have aggressive mutual funds [in an IRA], you can have your entire investment of your IRA in the ARK New Technology fund, and while that has gone up considerably in the past few years, there’s a massive amount of volatility, it’s extremely risky, and arguably much riskier than an MCA investment.”

Donahue reiterated that only “accredited investors” would have access to these types of investments through the Supervest platform.

As the partnership between the two companies kicks off, it’ll be interesting to see if individuals are willing to put their retirement money on the line to invest in small businesses.