June 2022
Vol 8 | Issue 585

Q&A with Andrew Pignanelli of Velvet


Principal Series:

Velvet is the easiest way to invest in private funds. We save institutional allocators time by automating diligence, standardizing fund analytics, and simplifying the investment process. Because Velvet is a marketplace, listings are maintained directly by managers which allows us to maintain the highest resolution data on all listings for our market. We sit at the center of a large private fund community, with more than 1000 people working on funds, allocations, or other financial services.

Join us for a private Family Office Insights one hour virtual pitch featuring Andrew Pignanelli, CEO of Velvet.

June 15, 2022 at 2:15pm-3:15pm EST
RSVP & Confirmation Required

Family Office Insights is a voluntary, “opt-in” collaborative peer-to-peer community of single family offices, qualified investors and institutional investors. Join the community here www.familyofficeinsights.com

How is Velvet changing the way allocators approach private markets?

The biggest issues for allocators right now involve sourcing and evaluating managers.

Allocators spend huge amounts of time evaluating hundreds of managers each year. The process hasn't changed in 30 years. Decks are shared and reviewed then a series of meetings takes place.

Velvet's approach is to streamline this process using a marketplace of managers and allocators. Using Velvet's marketplace, allocators can review dozens of funds at the same time, have access to in-depth diligence reports, and can review unique fund analytics. By saving time on discovery, evaluation, and investment, allocators can save 80% of the time it takes to make an investment decision on a fund.

How do allocators use data to make investments on Velvet?

Allocators make their own decisions to invest, but Velvet provides as much data as possible to allow them to best make these decisions. We collect basic information on a fund, such as documents, terms, and investment specifics. We also collect highest-resolution returns data on both venture and hedge funds - which allows investors to see a full picture of the fund's track record before even meeting the manager. Since we collect all of this data at scale, we're using it to train machine learning models and develop advanced analytics so LPs can make more informed decisions.

What are the trends in the market Velvet is taking advantage of?

The most important trend is the growth of the cryptocurrency funds market. Velvet is now the world's largest source of private cryptocurrency funds, and we're helping allocator institutions access these funds easily.

There's a large ongoing shift from institutions moving into cryptocurrency, and more specifically cryptocurrency funds. According to PWC, crypto hedge fund assets are growing 90% per year and outperforming traditional asset classes, which has piqued interest from large institutions like Franklin Templeton and Bridgewater.

The recent market shift has also increased the appetite for hedged and market neutral assets, which private funds serve well. According to Barclays, 35% of allocators are increasing their exposure to hedge funds in 2022 while 41% are increasing their allocation to PE/VC. Velvet is creating the standard for private funds, and we're going to be the sourcing engine for this large shift in allocations.

Andrew Pignanelli of Velvet

Founder and CEO – Former trader and ecommerce entrepreneur, Andrew started Velvet in his first year of college – when covid hit a year later he dropped out. At age 20, him and Alex Johnson became the youngest ever owners of a broker-dealer company.

Contact Andrew: andrew@velvetfs.com