Disrupting an Entire Industry by Making Alternative Investments More Accessible

During the 2008 recession, Perrin Quarshie, MBA ’16, CEO of RealBlocks, was watching the challenges that the investment community was facing. He hoped to learn what pitfalls to avoid and how to make a sustainable career. What he found, though, would go far beyond his short-term future.

"A lot of [the managers] were fully invested with the standard 60/40 portfolio of stocks and bonds, and their holdings were getting absolutely decimated," he explains. "They were also worried because many of them were nearing retirement at our firm, so I set out to find a better way to invest my money to improve the situation for my future self and for people like them."

Quarshie began researching alternative markets. He even invested in private real estate and venture capital himself, noticing it was difficult for retail investors to get access to funds. Separately, he observed engineering colleagues who'd been promoted struggling because they lacked established leadership skills. So, he developed a twofold interest in business school: to hone his interest in alternative investments and to establish the management skill set he knew he'd need.

MIT Sloan appealed to him immediately, and he became fascinated with the venture capital and entrepreneurial ecosystem. A Media Lab class taught by Sandy Pentland, PhD '82, (Toshiba Professor of Media Arts and Sciences; Director of Media Lab Entrepreneurship Program) called Media Ventures was particularly fruitful.

"I saw that digital assets were proliferating, but they weren't tied to physical assets that had stable value," he explains. "I saw a unique opportunity to take a digital asset and tie it to physical assets—meaning real estate funds."

Classes with Simon Johnson, PhD '89, (Ronald A. Kurtz (1954) Professor of Entrepreneurship) and Bill Aulet, SF '94, (Managing Director of the Martin Trust Center for MIT Entrepreneurship; Ethernet Inventors Professor of the Practice of Entrepreneurship) helped him understand scalability. "You as a technologist may build a product and think it's great, but the customer will have a totally different perspective," Quarshie says. "Your success will live or die based upon how well you listen to the customer, how well it meets their needs."

Quarshie also put his entrepreneurial acumen to the test. As team lead of a Global Entrepreneurship Lab (G-Lab) project, he helped Spanish company Smartick as they expanded their disruptive e-learning methodology to North America. "G-Lab threw the entrepreneur into the fire, being able to get on the ground in a new location, adapt culturally, and develop a level of understanding that's necessary to converge the team's work into a tangible and beneficial output," he explains.

Michellana Y. Jester (Lecturer, Global Economics and Management; Co-Faculty G-Lab Lead) says that Quarshie was a "well-respected team lead" who had strong analytical skills and a "solid appreciation and understanding of ‘people skills’ required to address the unspoken, intangible interests of the project sponsors as well as the parents/guardians the project sponsors were targeting."

Meanwhile, Quarshie was working on a project of his own: RealBlocks. On nights and weekends, and during his final spring semester, he began leveraging his personal interest in alternative investments towards creating a platform that would increase access and opportunity.

Now, the company helps alternative investment managers expand distribution globally. "Data show that the largest source of wealth creation for the middle class is real estate. But the vast majority of the population cannot access the best real estate investment funds. With RealBlocks, we've solved for that," he says.

RealBlocks has digital distribution of traditional assets and alternative investments in private real estate, private equity, and private credit. Their online system brings fund minimums lower and allows managers to create fund structures that have web-based access for retail.

Their first client, LaSalle Investment Management, a subsidiary of Jones Lang LaSalle (JLL), asked RealBlocks to build them a web-based platform to distribute their funds internationally. Quarshie cites his MIT Sloan experience for helping him be responsive to their needs. RealBlocks went from managing one of their funds to their entire business—$77 billion in assets—and exceeded sales KPI by 1,000 percent.

JLL then introduced RealBlocks to other firms, which customized the white-label platform to suit their needs. For one institutional real estate fund made up of CalPERS employees and teachers, Quarshie's team was able to take the fund’s $50 million investment minimum down to $25,000 and allow them to sell to individuals.

RealBlocks was accepted into TechStars, has raised three rounds of venture capital, and is working with new clients. The firm is headquartered in New York and has a rapidly growing team in multiple regions around the globe. "I'll have to come into a new environment again, with a new culture and new norms, and synthesize those into a culture that works for the company and team," Quarshie says. "G-Lab was a really great primer for that, too."