REITs
Liquidity, historical attractive returns, property type diversification, attractive yield, and potential hedge against inflation.
What are the benefits of investing in REITs?
Compared to the size of publically traded companies, portfolio companies held by private equity are typically this.
What are smaller companies?
Debt with credit ratings of AAA, AA, A, and BBB
What are the Investment Grade credit ratings?
Income, diversification, taxes, appreciation, and potential inflation hedge
What are the benefits of investing in real estate?
REITs valuations are closely linked to equity markets, deterioration of supply and demand fundamentals, and interest rate sensitivities.
What are the risks of investing in real estate?
Investments are held for 3-5 years and cannot be traded on a stock exchange.
What is the liquidty profile of Private Equity?
Debt with credit ratings of BB, B, CCC, CC, and D
What are the Below-Investment Grade credit ratings? Also known as "junk bonds"
Lack of liquidity, interest rate, market, and idiosyncratic (ex: weather)
What are the risks of investing in real estate?
Apartment, Office, Health Care, Shopping Center, Mall, and Hotel
What are the traditional areas of the real estate market?
Owning more than 50% of the portfolio company allows private equity firms to control the portfolio company's operations.
Why do private equity firms want majority control (own more than 50%) of portfolio companies?
Compared to Private Equity, the upside to Private Debt is this.
What is Fixed (or limited) upside?
Amount of profit you bring in each month after collecting all income, paying all operating expenses, and setting aside cash reserves for future repairs and vacancies.
What is Net Cash Flow?
Cell Towers, Industrial, Data Centers, Senior Housing, Self Storage, Single Family Homes, Manufactured Home, and Life Science
What are "next generation" (or alternative) areas of the real estate market?
Complete access to management team and financials are available in real-time
These newer Private Credit firms replaced many of these financial institutions as lenders to companies
What are banks?
Liquid x Equity portion of the Real Estate Investment Quadrants
What are REITs?