The Investment Idea Marketplace: Q&A With Harvest CEO Peter Hans

 

Harvest LogoInvestors are looking for ideas. That’s how one earns investment returns. But only the best-quality ideas matter — the others are just noise.

The world of marketplaces, where sellers and buyers meet without middlemen, ought to be a good place for those with money to invest to find others who have thoughts on where to invest. Two-year-old Harvest Exchange Corp. was set up to connect investors to ideas.

Max spoke with the marketplace’s founder and CEO, Peter Hans, about why investors need a place to share ideas, how the asset-management industry is consolidating, and what cool new things he’s seen recently.

 

Max: Tell us Harvest’s story.

Peter Hans: Harvest was founded in 2012 and we launched the platform in the fourth quarter of 2013.  We’re headquartered in Houston, Tex. and have an office in New York City.  Harvest’s user base is predominantly sophisticated, high net worth, accredited, and professional investors who use Harvest to both ‘discover’ and ‘be discovered.’  There are north of 5,000 investment firms, made up of tens of thousands of investors, managing over $5 trillion in assets, who have combined to share over 75,000 pieces of unique investment content.  This content is accessed by over 125,000 unique investors within Harvest, and far more externally.  Harvest users and firms are in over 150 countries, roughly 70% of which are in North America.

 

 

  • What problems is Harvest solving?

Harvest is dedicated to reducing inefficiencies and costs inherent across the investment industry business model. Harvest is taking a very unique approach to an old problem by leveraging technology and the power of quality, branded, crowd-sourced thought leadership to build an in-market network of investor “buyers” and “sellers.”  The top quality, curated content improves investor information access and product discovery, which promotes an organic environment of scalable, targeted, and regulatory compliant brand enhancement and reverse inquiry marketing.

While Harvest has features and functionality consistent with other ‘social networks,’ Harvest’s philosophy is different.  Social networks help people to interact and engage with their existing networks, however Harvest helps investors leverage the collective expertise to grow their networks and knowledge base.  Harvest aims to be the marketplace for investors, not the social network, and I feel that’s an important distinction.

 

 

  • What are some trends you are seeing in the markets? What do you expect will become important trends in the second half of the year?

The asset management industry is ever evolving, though I think the most interesting trend centers around consolidation and growth.  The large firms, whether on the sell or buy-side, continue to get larger while the boutiques will either be acquired or accept the official transition to a boutique/regional player.  I am seeing this clearly play out in firm’s marketing budgets and strategies as the larger, global firms, are increasingly investing time and resources in achieving a more scalable and data-driven growth plan.  It will be very interesting to see where the line in the sand is drawn and how smaller firms evolve their approach to client education, acquisition, communication and retention.

Marketplaces have helped to revolutionize other industries, both for the benefit of the buyer and seller, and we are in the very early innings of how this can be applied to the investment industry.  We are still a ways off from a full cultural adoption but it’s very clear to me, and to Harvest users, that there is substantial benefit in the approach.

 

 

  • What’s the coolest new thing you’ve seen recently?

Interesting question.  I’ve recently become familiar with Clearserve, which offers private banking clients and ultra-high-net-worth investors access to robust data aggregation for the purposes of enhanced reporting, risk exposure, and analytics.  Like harvest, Clearserve is also focused on solving an age-old industry pain point, and I think they are doing it very effectively.

I also think vertically integrated marketplace platforms like Fundrise are interesting, and potentially very powerful.  Fundrise has tackled a difficult-to-obtain asset class — commercial real estate– and made it available to accredited investors through the creation of tracking securities.  Platforms like this are very difficult to build as it’s reliant on access to deal flow, and the subsequent growth of buyers.  That said, Fundrise has done an amazing job of growing and improving both the platform and offerings in the face of these inherent challenges.

 

 

  • Looking ahead to the rest of 2015, what do your members think will happen in the markets?

Harvest users are very diverse in asset class and strategy, as well as in macro viewpoints.  The best thing to do would be to discover those investors that you are interested in tracking, based on their expertise and knowledge, and receive notifications when their viewpoints are shared.

Stock Picking for a Cause: Q&A with Portfolios with Purpose Founder Stacey Asher

Portfolios With Purpose founder Stacey Asher (left) presents a check to the Jericho Project.

Portfolios With Purpose founder Stacey Asher (left) presents a check to the Jericho Project.

On a trip to Tanzania in 2011, Stacey Asher discovered that the charity food pantry where she was volunteering was vulnerable to shutting down in situations where it didn’t have enough money, leaving 250 local children hungry. Asher, on vacation from her job in hedge fund marketing in New York City, asked how much it cost to fund the operation for a month.  The answer: a mere $250.

Asher figured she would have no trouble canvassing her network of finance friends back home to ensure a steady stream of donations that could keep the kitchen open. Then she thought, what else could she do to support her friends’ favorite causes while asking them to back hers?

The model she came up with is a cross between fantasy football and stock-picking: a stock contest that lasts a year and involves choosing 5 stocks. Participants, 90% of whom are finance professionals, pay an entry fee and choose a charity to support. The money that’s raised goes to the charity chosen by the winner in each contest category.

Portfolios with Purpose launched in 2012 as a beta, raising $25,000 for charity; the next year, after a public launch, the nonprofit raised $185,000. Based in New York City, the nonprofit now attracts some of the biggest names in the world of hedge funds and Wall Street.

Basis Points asked Asher about her idea of linking stock picking and philanthropy, and where her nonprofit is headed next.

– Is stock-picking something you do yourself?  

One of the many reasons I started Portfolios with Purpose was to create a contest in which everyone with an interest in stocks and philanthropy could participate. I was always interested in the stock market, but never confident enough to actually invest outside a small investment account comprised predominantly of index funds.  Portfolios with Purpose offers a fantasy stock competition that is completely anonymous unless you are in the top standings.  I hope this provides even the most timid of investors to test their skills and see how they rank amongst the top investors in the world as well as against their peers.

– What are the most popular charities/causes for contestants to choose?

The three most supported charities this year include Wounded Warrior Project, New York Hedge Fund Roundtable, and St Jude Children’s Research Hospital. We have over 200 different charities represented in the competition. Each charity listed includes personal comments from each player about why he or she chose the particular charity as well as a direct link to each charity’s homepage.

– What’s next for PwP?

With the 2015 contest only a month away (registration opens on October 15th), we are working hard to make sure we have another successful year. We also have PwP Mini Games launching on Oct 1st. PwP will now allow friends, firms, schools and any other social groups to customize and host their own competitions throughout the year. Mini Games will open up more opportunities for people to compete, have fun and raise money for even more worthy charitable organizations.