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SoFi and Templum Partner for Expanded Access to Alternative Assets

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Templum is partnering with SoFi to democratize access to alternative investments, traditionally reserved for the ultra-wealthy. SoFi aims to empower over 8 million members by offering them unique investment opportunities. The global market for alternative assets is projected to reach $24.5 trillion by 2028, up from $16.3 trillion today. This collaboration will leverage Templum's technology and regulatory expertise to provide everyday investors with higher and uncorrelated returns, enhancing portfolio diversification. Both companies are committed to increasing innovation and investor confidence in this rapidly growing sector.

Positive
  • Partnership expands access to alternative investments for over 8 million SoFi members.
  • Global alternative assets under management are expected to grow to $24.5 trillion by 2028.
  • Collaboration between SoFi and Templum aims to increase innovation and investor confidence.
  • Alternative investments offer potential for higher and uncorrelated returns.
  • Partnership provides unique investment opportunities, enhancing portfolio diversification.
Negative
  • Alternative investment landscape remains fragmented and manual, limiting access.
  • Individual investors have historically had access to alternative assets.
  • Potential risks and lower liquidity associated with alternative investments.

SoFi’s collaboration with Templum aims to democratize access to alternative investments, typically reserved for high-net-worth individuals and institutional investors. This partnership means that SoFi's 8 million members will have new opportunities to diversify their portfolios by investing in assets with potentially higher and uncorrelated returns compared to traditional investments.

From a financial perspective, this move could significantly increase SoFi’s user engagement and retention. Expanding the range of investment products can also boost assets under management (AUM), driving revenue growth for SoFi through potential management fees and other associated costs. This strategic initiative aligns with the trend of fintech companies leveraging technology to provide more investment opportunities to retail investors.

However, it’s important to consider that while alternative investments can offer higher returns, they also come with higher risks, lower liquidity and often require longer time horizons. Retail investors must be educated about these risks to avoid potential losses and SoFi might need to ramp up its investor education and advisory services.

For long-term investors, this could be a positive development, signaling SoFi’s continuous innovation and potential for growth. However, short-term volatility could arise from execution risks and market reception of these new investment products.

Alternative investments, which include assets like private equity, hedge funds, real estate and commodities, have been gaining traction due to their potential for higher returns and diversification benefits. This partnership taps into a market projected to grow to $24.5 trillion by 2028, indicating a significant growth opportunity for both SoFi and Templum.

For SoFi, entering this space means appealing to a broader audience, particularly those seeking investments outside of traditional stocks, bonds and mutual funds. This move positions SoFi as a more comprehensive financial platform, which could attract new users and increase its market share.

However, the success of this initiative will largely depend on SoFi’s ability to seamlessly integrate these alternative investment options into its existing platform and educate its user base about the risks and rewards. The fragmented and manual nature of the current alternative investment landscape poses a challenge, but leveraging Templum’s technology and regulatory expertise could be a competitive advantage.

While this expansion could lead to higher engagement and a diversified revenue stream for SoFi, it’s essential to monitor how effectively the company manages the associated risks and regulatory hurdles in the alternative investment space.

Templum is Working with SoFi to Grant Everyday Investors Access to Alternative Investment Opportunities Historically Reserved for the Ultra Wealthy

NEW YORK--(BUSINESS WIRE)-- Templum, Inc. ("Templum"), the operating system for private markets and alternative assetsTM is pleased to announce that the company is working with SoFi, the all-in-one digital personal finance company, to expand everyday investor access to investment opportunities with its recent launch of Alternative Investments.

“At SoFi, we spend every day working to empower our 8M+ members to get their money right so that they can achieve financial independence – and investing is an important part of that – but unfortunately, many valuable investment vehicles have been left inaccessible to the everyday investor,” said Anthony Noto, CEO of SoFi. “We recently changed that paradigm by expanding access to alternative investments. As we look ahead, SoFi is partnering with Templum to find even more ways to give SoFi Members unique access, as we continue to deliver on our commitment to providing them with unmatched choice and flexibility when it comes to investing their hard-earned money.”

Over the past decade, alternatives have expanded rapidly, becoming an important way to build and protect wealth, with global alternative assets under management expected to reach $24.5tn by 2028, compared with $16.3tn today.1 Despite the growing demand, the landscape remains fragmented and manual, limiting access, innovation, and investor confidence. Together, SoFi and Templum are bringing best-in-class technology and infrastructure capabilities to facilitate access to one of the fastest growing sectors of investments.

Alternative investments have the potential to provide higher and uncorrelated returns compared to traditional investments and offer opportunities to invest in assets with significant growth potential.2 While alternatives have become increasingly common in institutional portfolios, individual investors have had limited access to these assets. By bringing access to alternatives and private markets, individual investors will have the opportunity to review unique and sought after investments to build portfolios that can have improved returns and diversification.

“Partnering with SoFi is a great example of how like-minded firms can come together to increase investment access and opportunity,” notes Christopher Pallotta, CEO and founder, Templum. “Templum’s technology, regulatory foundation, and Alternatives expertise, combined with our work with leading fund managers, allows us to bring some of the most sought-after investments to SoFi. We are excited to be with SoFi at the forefront of one of the largest transformations in markets today.”

About Templum

Templum is accelerating access to private markets and alternative investments through robust technology and a regulatory framework that is automating legacy processes and unifying a fragmented ecosystem. Through Templum, investors can participate in new asset classes through integrated market technologies and APIs for primary issuance, secondary trading, alternative data, and Templum One, our private markets and alternative assets ecosystem solution. Templum's combined solutions improve efficiency and access in private markets by enabling seamless, electronic workflows for alternative investments and standardized infrastructure to support operations, rather than the fragmented manual processes currently used in private markets. Templum unifies private market infrastructure, investment opportunities, and investor capital into a single solution for private securities and alternative assets.

Templum Markets LLC., a wholly owned subsidiary of Templum, Inc., is a New York-based broker-dealer, and Alternative Trading System (ATS) approved to trade unregistered private securities in 53 U.S. states and territories. For more information, please visit www.templuminc.com.

About SoFi

SoFi (NASDAQ: SOFI) is a member-centric, one-stop shop for digital financial services on a mission to help people achieve financial independence to realize their ambitions. The company’s full suite of financial products and services helps its more than 7.5 million SoFi members borrow, save, spend, invest, and protect their money better by giving them fast access to the tools they need to get their money right, all in one app. SoFi also equips members with the resources they need to get ahead – like career advisors, Credentialed Financial Planners (CFP®), exclusive experiences and events, and a thriving community – on their path to financial independence.

SoFi innovates across three business segments: Lending, Financial Services – which includes SoFi Checking and Savings, SoFi Invest, SoFi Credit Card, SoFi Protect, and SoFi Insights – and Technology Platform, which offers the only end-to-end vertically integrated financial technology stack. SoFi Bank, N.A., an affiliate of SoFi, is a nationally chartered bank, regulated by the OCC and FDIC and SoFi is a bank holding company regulated by the Federal Reserve. The company is also the naming rights partner of SoFi Stadium, home of the Los Angeles Chargers and the Los Angeles Rams. For more information, visit SoFi.com or download our iOS and Android apps.

1 https://caia.org/content/january-2024-next-20-trillion-alternative-investments
2 https://investors.sofi.com/news/news-details/2024/SoFi-Breaks-Down-Barriers-to-Investing-By-Offering-Alternative-Investments/default.aspx

Investor

Templum: bdoperations@templuminc.com

Media

Templum:

Julie Ros

jros@templuminc.com

SoFi

Meghan Brown

PR@sofi.org

Source: Templum, Inc.

FAQ

What is the significance of the SoFi and Templum partnership?

The partnership aims to democratize access to alternative investments, traditionally reserved for the ultra-wealthy, by leveraging Templum's technology and regulatory expertise.

How many members does SoFi aim to empower through this partnership?

SoFi aims to empower over 8 million members by offering them unique investment opportunities.

What is the projected growth of the global alternative assets market?

The global market for alternative assets is projected to reach $24.5 trillion by 2028, up from $16.3 trillion today.

What are the benefits of alternative investments according to the SoFi and Templum partnership?

Alternative investments offer potential for higher and uncorrelated returns and enhance portfolio diversification.

What are the potential drawbacks of alternative investments mentioned in the press release?

The alternative investment landscape remains fragmented and manual, limiting access and posing potential risks and lower liquidity.

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