If you are a sophisticated private investor or a professional institutional investor you may already have your own ways to make your return on investment. However, the thing is that nowadays, the ways we operate and invest have become more limited in time and are not valid for a very long time. Flexibility and adjusting to a constantly changing market is the edge that everybody on a personal and professional level is searching for when it comes to investing. Small investment firms managing under $10M and mid-size funds managing anywhere between $50-250M are focusing on sustainability and safety. We are no longer in the $10K-100K investment zone where we expect 50-100% returns in the short term. Quite the opposite, when managing larger capital investors tend to play the safest strategies even if it means getting 5-10% of annual return.
To dive into the subject of investing and managing capital, we interviewed Paulius Stankevicius, who is the CEO and founder of Stankevicius Alternative Investment Banking which is a financial service division of Stankevicius Group.
Paulius Stankevicius works with investment banks and financial institutions and helps them to enter foreign markets in different continents with different cultures. This is actually what Stankevicius Group does quite well. Stankevicius Group helps companies to enter foreign markets nearby and overseas while executing strategy, business development, and managing clients’ public image.
Stankevicius Alternative Investment Banking is a division of Stankevicius Group that focuses on financial services and investor relations. Stankevicius Alternative Investment Banking has worked with clients in the digital asset management space and is now actively stretching its activities into the traditional financial markets with equities, bonds, and commodities.
We are thrilled to have you join us today, welcome to Fast Company interview! Let’s start off with a little introduction. Tell our readers a bit about yourself and your company.
My name is Paulius Stankevicius and I am the founder of Stankevicius Group which is a corporate consulting group. We focus on 3 business areas. Marketing is the primary business which covers over 50% of our business activities. The core activity of our marketing business is the public image and reputation management for small businesses and corporates. Secondly, we do a lot of general trading with physical commodities such as pharmaceutical products, agriculture commodities, metals, oil & gas, livestock, and many other alternatives. And thirdly we work in financial services. In this sector, we manage investor relations for clients and we represent various global investment banks and financial institutions to whom we recommend high-net-worth individual clientele and smaller institutional investors.
What is the greatest investment deal on the market right now?
I’d say security is the best deal any investor can get. Trust is a very big problem in the market right now and anyone who can offer any type of additional layer of security is worth considering doing business with.
We have clients who are financial institutions that we represent to our other clients that are looking to invest somewhere, either in private equity or public markets. We create advanced strategies for our institutional clients to give the most benefit to investors such as no management fee structure, lower success rate sharing fees, or even fixed income with insurance. We create all sorts of things while trying to please investors. And I would say considering doing business with companies that are trying and giving options for security is worth your time and might bring the greatest investment deal you have ever had.
What difficulties do mid-sized funds face today versus larger funds?
The way I see it, in my opinion, mid-sized funds may have limited access to where to place the funds properly in order to generate steady passive returns without a headache. Let’s say you have $100M. Typically, a fund like that will definitely diversify that $100M into real estate, stocks, equities, probably commodities, maybe even 5% on digital assets, and so on. Managing the diversification and keeping the updates can become a very big headache, especially in real estate because it’s not liquid. On the other hand, all electronic trading-based investments and contract purchases online can seem too risky. I’d say mid-size funds don’t have enough vendor diversification to where they can put the funds and that is why there are funds that stay at $100M AUM for a very long time.
Now, for these funds, 10% could be a good deal. If managed properly, getting $10M per year is a good deal but $100M funds have certain safety aspects which make them difficult to work with. Because in the financial markets, $100M is not that big of money and you can’t really afford to screw up, because if you screw up on a $100M deal then it’s very hard to recover. However, a $1B fund or $10B fund does have money for screw up. Even if they lose $500M they are fine and still alive. That is what makes larger funds more flexible toward investments. In this case, larger funds can participate in more advanced investment models because they have enough liquidity. At the same time, advanced investment models bring a great return which can be much higher than the standard 10%. The issue is that advanced investment models may sound risky for a $100M mid-sized fund while in reality, it’s actually not. The difference is that to make money you actually have to put in the full $100M which is doable for a large fund but very difficult and very risky for a mid-sized fund. That is why mid-sized funds are limited in ways of how they can make money while large funds just simply have more cash to move around and make bigger moves. Even if they lose 2 deals out of 3 but that 3rd deal can bring 5-10x returns. That is a different level.
Are you talking about the digital asset market or the traditional stock market?
I am referring to the traditional stock market but the digital asset market has its own pros and cons, and I would not discount the digital asset market to be irrelevant. There is a lot of money. Now, getting back to traditional markets big asset managers and investment banks know the game of algo trading. Algo trading is the game changer in the stock market. You can create strategies that are just simply humanly not possible to execute but a machine can do it. To understand this might be difficult and that is why not everybody is winning. The banks play the best game by talking retail money and giving 1% returns or at times even less, but themselves from all the money they collect, they do make 10-20x much more than that. So why is it that retail is getting 1% and the bank is getting 99%?
What’s the game play in investing and what is the main difference between retail and professional investor?
Here lies the misunderstood conception of trust. Retail investors trust in hierarchy and they have this belief that higher-ups know what they are doing, they are the supervisors, they’ll keep control, and they will make sure it is safe. While in the real world, everybody who tries to understand the scheme just a little bit, everybody can be like the bank and earn like the bank. At the end of the day what is important to understand and remember is that people working in the bank are the same retail people that invest with the bank. The investment decisions that happen in the bank are done by the same retail people that work at the bank. The ones who invest are the same people who make decisions about where to invest. So if you think about it, why would you go to the bank and invest with the bank or even any other institution if you aremade of the same clay. The answer to this is simply you have to find the best alternative. Talk to different firms, see what they offer, don’t make the decision with the first one or two, meet even 10 or 20 firms, and try to learn. Maybe in the end you will understand the game and decide to invest by yourself.
The funny part is that banks can lose and investment firms can lose, and you can also lose. It’s about time and learning. The reason why people go to other people is because those other people have put more time into learning. That is why people invest with other big firms because people who work at those firms put their entire lives into the industry, the knowledge is in their DNA.
What do you exclusively offer through Stankevicius Alternative Investment Banking?
When it comes to professional institutional clients, we have really good deals right now available that are being offered by top European and Australian wealth management and investment firms. We closely work with 2 firms at the moment. We offer clients 2 options based on risk appetite. First, 10% per year fixed return, no strings attached. And second, non-fixed returns up to 20-50% per year. Both firms that we represent are audited, licensed, and supervised by respected authorities and have proven strong track records.
How would you recommend mid-sized funds and even large funds to manage wealth?
Investment banks and big financial institutions have actually really advanced solutions, and I am talking algo trading. Finding the best firm to invest with which has proved track record based on actual data and audited reports is the key. I simply recommend to any high-net-worth individual or institutional client to contact our firm and we will gladly connect you to the best people in this field and there are no fees for that. We do not charge the client. We only make them money.