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Lifelong investor and alternative investment expert Zachary Cefaratti has amassed a wealth of knowledge in his 35 years. In fact, his vast experience with hedge funds, private equity, venture capital, private debt, digital assets, and fintech inspired him to found the world’s leading gathering for alternative investment management, AIM Summit.
It was after attending a number of alternative investment industry conferences that Cefaratti noticed a gap in the market. Although networking is an important reason to attend conferences, he found that the quality of the meetings were often overly commercialized, which was disappointing to someone hoping to gain insight and ideas from attending, as well as network with like minded investors. In 2015, he took matters into his own hands; AIM Summit is now in its 15th Edition, proudly serving investors and managers with comprehensive discussions of the industry’s biggest challenges and opportunities.
With a focus on “connecting people, connecting ideas, and connecting markets,” AIM Summit has hosted conferences in London, Dubai, Abu Dhabi, and Geneva. Unlike typical conferences, AIM Summit is not focused on profitability; instead, Cefaratti seeks to deliver the best possible conference with the highest quality attendees and content. In fact, all profits that are generated by the conference are invested back into maximizing value for attendees of the next edition.
In its earliest form, AIM Summit addressed only the hedge fund industry and launched its first event in partnership with the Alternative Investment Management Association (AIMA). From 2016, additional topics under the alternative investment umbrella were added.
“Alternative investments play a crucial role in an investor’s portfolio by providing diversification, potentially generating higher returns, and mitigating risks,” Cefaratti explains. “They focus on generating alpha, which refers to the excess risk adjusted return over the expected return of a benchmark index or a passive investment strategy, by exploiting inefficiencies in financial markets.
By focusing on alternative investments, I am able to play a role in making markets more efficient and fairer – adding value through active management, taking advantage of arbitrage opportunities, exploiting illiquidity premiums, and helping to institutionalize niche investment strategies.”
Who is Zachary Cefaratti?
Cefaratti, who is also the Founder of an investment banking and asset management firm, is a leader in the world of investment banking and alternative investments, and is deeply passionate about finance. After working as a child actor in California, he began purchasing his first bonds at 7 years old; as a young teenager, he bought stocks. From there, his interest in finance only grew.
By 16, Cefaratti was interning at Chase Bank, which gave him the experience to start a boutique financial and insurance brokerage business that paid for his studies at the University of Pennsylvania, London School of Economics, Franklin University Switzerland, and the Foster School of Business at the University of Washington.
In the midst of his studies, the 2008 financial crisis and his father’s advancing dementia forced Cefaratti to temporarily drop out of college. With his father unable to support himself financially or physically, Cefaratti managed to grow his brokerage enough to support both himself and his father, as well as pay for his return to school. His experiences during the dotcom bubble and the global financial crisis led Cefaratti to alternative investments and uncorrelated markets.
“Following volatility I experienced in my personal portfolio in my formative years, I learned to appreciate greater consideration of risk management and focus on risk-adjusted returns,” Cefaratti says. “I realized that the only way as an investor to outperform the market on a risk-adjusted basis in the long term was to focus on exploitable inefficiencies in financial markets, which is the realm of alternative investments.”
Despite having faced significant adversity and numerous challenges, Cefaratti embraces every step of his journey, using it all as a learning experience. As he says, “The world owes me nothing, and it was only through my own hard work and dedication that I would be able to support my father and myself.”
One of Cefaratti’s favorite quotes is Winston Churchill’s definition of success: “going from failure to failure with no loss of enthusiasm.” He laments the current education system that shields children from failures, rather than teaching them to learn from their mistakes. By his own admission, Cefaratti’s success has only been possible by overcoming adversity and managing risk, not by avoiding it altogether.
Now based in Dubai, Cefaratti enjoys the many benefits of living in an “international city” of ex-pats in the heart of the Middle East. In addition to the high quality of life Dubai offers, it is also an ideal time zone for dealing with international investments, situated evenly between the West and East. Dubai acts as a hub between emerging and advanced markets and provides its businessmen with nonstop flights to key markets all over the world on its top airline, which facilitates global dealmaking.
What’s Next for Cefaratti
Although Cefaratti is engaged and planning a summer 2023 wedding to his German fiancee Hannah, he admits that work and finance take up the majority of his time.
“I do not personally believe in work/life balance because as an entrepreneur, my life is my work and my work is my life,” he admits. “I am fortunate to have loved ones personally who have also been incredibly supportive of my business, and have also integrated themselves into supporting my business.”
But Cefaratti’s fascination with all things investment-related means that he truly enjoys his immersion in the subjects – so much so that he even spends his “free” time studying interest rates, bond prices, and inflation. Any time away from the office is spent reading Federal Reserve papers, engaging with influential former central bankers, and researching potential shifts in the price of money, all of which influence the decisions he makes in his professional and personal life. Zachary also lives less than 100 meters from his office in the Dubai International Financial Centre (DIFC) and enjoys his 2 minute daily commute.
In terms of where Cefaratti sees his industry heading, he says that he’s “excited about the future of digital securities and tokenized assets. Currently, when stocks and bonds are traded on global markets, there is a lag between the time that a trade is agreed and the time that the settlement of the trade occurs. This lag is typically only 2 business days, but the lag introduces risk that requires a network of intermediaries to address – and which in turn extract rents from the system. Tokenized assets and digital securities allow for ‘atomic swaps’, with which the agreement and settlement of a trade can happen simultaneously – which would allow markets to be less risky and more efficient “
Cefaratti also sees growing opportunities in emerging and frontier markets, where “strong demographics, improving fiscal and monetary independence and a burgeoning middle class offer opportunities for growth.”
As for AIM Summit, their next Edition will occur in Dubai on October 30-31, 2023. Speakers will as always include the world’s leading economists, as well as global thought leaders and industry decision-makers. In the past, speakers have included Larry Summers, Charles Goodhart, Mike Novogratz, Tim Draper, Mark Mobius, Mohamed el Erian and many other financial and economic thought leaders. All seminars are thoughtfully prepared to focus on opportunities, strategies, current and future market conditions, and valuable insights that encourage discussion amongst attendees.
As the current global economy grapples with interest rates, asset allocation, digital assets, tokenization, and the US-China decoupling, investment opportunities are changing. But you can expect Zachary Cefaratti to be on top of every change, and to hear all about what they mean at his AIM Summit.
