IMN's Eleventh Annual Western Non-Traded REIT & Retail Alternative Investment Symposium
Addressing the latest on Non-Traded REITs; BDCs; Regulation D/Private Placements;
'40 Act Interval Funds; Regulation A+; and Oil & Gas offerings
December 2-3, 2015, Dana Point, CA
Draft AgendaPre-Conference Workshop: Analyzing the Economics of Full Term Deals - Traded Vs. Non-Traded Products Separating Fact from FictionAfter the success of this pre-conference workshop at our June NYC symposium, we are pleased to offer this enhanced version which delves even deeper into some of the key issues at hand. There has been much debate over the years on the merits and drawbacks of Traded vs. Non-Traded investment products for both sponsors and retail investors. Particular focus has been given to front end fees and whether this puts Non-Traded product retail investors at a disadvantage from the start that cannot be regained. Recent studies have examined the relative performance of Traded vs. Non-Traded products. The findings in the studies have confirmed or dispelled some commonly held assumptions and has paved a path for further debate. In this opening session we revisit the issue by analyzing the economics of Traded and Non-Traded products over the course of their lifecycles. We compare and contrast costs, fees and performance and attempt to break down the Non-Traded model for both sponsors and retail investors.
Non-Traded REIT & Non-Traded BDC Year End Market Update
- Front end fees / both acquisition and capital raising
- Annual costs including asset management fees and general and administrative costs
- Sponsor, director and officer promotes and incentive fees
- Dividend rates, IRRs and total returns
- Performance metrics-MFFO, FFO, AFFO, Core FFO
- Advised vs. internal management-pros/cons
* Capital raising: How does 2015 compare to recent years? Who are the top $ raisers by product type in the alternatives market? Are any alternatives likely to threaten the dominance of Non-Traded REITs? Are current capital raising trends amongst products likely to be permanent or an anomaly? What can we expect for capital raising market-wide in 2016? What will be the impact of FRN 15-02 on Non-Traded REIT/BDC/other DPP sales? Quantifying the impact of the change in definition of an accredited investor under FRN 15-02 * Non-Traded REIT/BDC performance: Who were the winners of 2015? What factors will likely impact performance/returns in 2016? * What was the rate of new product registration this year? Was this up or down on recent years? Will there be a significant increase in 2016? Who are the prime candidates for new product launches today? Will these industries continue to be dominated by a few big players? * What further product structure innovation can we expect within this market sector? Will new structures open up new distribution channels? * Liquidity events: Why wasnt 2015 as active as anticipated? What activity can we expect in 2016? * M&As: Will consolidation between sponsors and/or IBDs continue at the same pace? * How are the dynamics of the Non-Traded REIT and BDC industries changing? What will these industries look like in 2-5 years time? What will this mean for product sponsors? Retail investors? *Non-Traded REIT CEO/President Panel
* FINRA RN 15-02: With just 4 months to go, how have you responded? Have/will you reduce/eliminate front end fees? Have you/will you develop multi-class deals? What should Non-Traded REIT product structures look like in this evolving regulatory climate? * How are you viewing competition for retail investor $ from the growing number of retail alternative product launches? Are brand names such as Blackstone and KKR entering the market a good or bad thing? * Why do RIAs tend to prefer other alternative investments to Non-Traded REITs? How can this trend be reversed? How are you addressing Broker/Dealer and RIA concerns and better meeting retail investors needs? * What is your take on the current health of the Non-Traded REIT market? Can Non-Traded REITs deliver in todays investment environment? Where do you see the greatest market opportunity in the near-term? Long-term? Where will growth come from? How are you positioning to take advantage? What do you anticipate the Non-Traded REIT market will look like this time next year? Will traditional investors come back after the dust of 15-02 has settled? * What is your take on CRE investment and capital raising opportunities within Europe? Other overseas markets? Are they worth the extra hurdles? * Are you anticipating further product launches? Into new product types? What product types would you not launch? Why? Will another product rise to the same prominence as Non-Traded REITs? If so, what will it look like? * Where will retail investors be concentrating their money in the next 2-5 years? *Liquidity Events to Maximize Shareholder Value: The Need to Know for Sponsors, RIAs & Broker/DealersIn this session we examine the key factors for consideration by both product sponsors and broker/dealers and RIAs when it comes to liquidity events and the maximizing of shareholder value. We explore the different liquidity options M&As, listings, portfolio sales -and the subsequent decision and action points. Among the issues under discussion are:
- Assessing the pros/cons of the different liquidity event options:
- For product sponsors
- For retail investors
2016~ Broker/Dealers & RIAs Doing Business in The New Alternatives World Order
- How do liquidity events impact the economics of the product?
- Key issues/considerations for the Board of Directors/Executive Management
- Corporate governance structures to avoid possible conflicts of interest
- Key considerations for broker/dealers & RIAs in representing client interests/maximizing shareholder value during the liquidity event
- Broker/dealers & RIAs: Considerations and decision points for reinvesting client capital
- To what degree do sponsors influence share price upon a listing?
- Sponsor-broker/dealer RIA communications for a smooth liquidity process
- Tax planning, structuring and ongoing compliance
- Learning from recent liquidity event successes and failures
* What are the liability/exposure considerations in selling products now with new products with lower upfront loads on the horizon? * Will advisors stick with the new compensation structure or avoid and look at other alternatives? How will firms deal with a slowdown in revenue from the larger up front commissions? * What are acceptable criteria for the selection of a low load product? An economically neutral product? How to select between different share class products? How to pick share classes? * How to comply with contract exemptions under the DOL proposed fiduciary rule? * Assessing the impact of Robo Advisors on the sale of retail alternatives/on IBDs * E&O insurance considerations in the new world order *Capital Raising Today: Playing A Whole New Ball GameThis time last year we compared and contrasted different methods of raising capital the traditional IBD network, crowdfunding under Reg D 506(c) and Regulation A+. 12 months on a Non-Traded REIT has filed to raise $ directly from investors and bypass the IBD route, Regulation A+ is now active, and we are seeing the rise of robo-advisors with automated and web-based investment solutions being touted as the next big thing. In this session we examine new and traditional methods of raising capital in todays retail alternative investment market with a view towards what will become the key methods of tomorrow.
* Crowdfunding under Reg D 506(c): What can we learn from the first Non-Traded REIT filing to utilize this method of capital raising? Why havent more Non-Traded REITs jumped on this bandwagon? Will we see more in 2016? How are Broker/Dealers viewing such Reg D 506(c) offerings? How does crowdfunding work? Do in-house or use a third party provider? What are typical costs, fees, structures? Are some product sponsors better suited than others to this method of raising capital? * Reg A+: 6 months in, is it working? What is the rate of filings? What can we learn from the experience of the first issuers? How are Broker/Dealers viewing Reg A+ offerings and what is their appetite? Can we expect an influx of new issuances in 2016? What are the pros and cons of Reg A+ for both product sponsors and retail investors? The compliance issues? * Robo advisors and web-based advisory solutions: Is this the future of retail investing? A way to access the lucrative Millennial market? What place do/could robo advisors have in DPP sales? What are their pros/cons for sponsors/retail investors? * Raising capital from foreign investors: Navigating the options and their complexities * In summary: Reg D 506(c) vs. Reg A+ vs. automated investment systems vs. traditional IBDs - how will capital raising methods in the retail alternative investment market shake out in the next 5 years? *DOL, FINRA, SEC, NASAA: A Practical Understanding of What the Latest Regulatory Developments Mean for Product Sponsors & Broker/DealersIn this panel discussion we take a practical look at how key regulation/legislation will directly and indirectly impact product sponsors and independent retail broker/dealers (IBDs) and RIAs.
Best in Class? Comparing & Contrasting New Product Structures that Meet New Regulatory Requirements In response to an evolving regulatory environment, new product structures are being introduced to the retail alternative investment industry. In this panel we compare and contrast some of these offerings and sponsor representatives weigh in on what will be the best in class retail alternative investment product of the future. Among the discussion points are:
- The Department of Labor (DOL) Proposed Fiduciary Rule
- FINRA 15-02
- SEC updates
- NASAA: What is on the horizon?
* Briefly outline your product structure: What is the rationale behind it? What investor/regulator wants does it fulfil? * What is your investor base profile and what has been the investor uptake? * What are performance/return expectations? * What were the timing considerations in your launch? Costs? Fees? What would you have done differently with hindsight? * What are the sales & marketing considerations? How are you educating broker/dealers on your new product? What feedback are you getting? Is there a risk that too many dissimilar products could fracture the industry? * Compliance & due diligence issues * Exit strategies *Assessing the Investment Potential of New & Existing Alternative Asset Types in 20162016 is another pivotal year. In this session we address the investment potential of new and existing asset types for retail alternative products against the backdrop of a strengthening economy and a presidential election year. Among the discussion points are:
* Some analysts predicted that 2015 would be the best year of economic recovery since the 2007 crash: Where are fundamentals at year-end? What is the 2016 macro-economic outlook and what is the impact of it being a presidential election year? The prospect of rising interest rates? Where are we in the real estate cycle? Are CRE pricing bubbles forming? Are there still opportunities to capture upside in either fundamentals or prices? In what markets? In what property types? Are current asset classes popular amongst alternative product sponsors over-subscribed? Is now a prime time for Non-Traded REIT sponsors to consider new asset types? Infrastructure, farmland, student housing, cell towers, correctional facilities, something else? What new asset types are attracting interest amongst Non-Traded REIT sponsors? What are the due diligence considerations? * What can Non-Traded REIT sponsors learn from the successes of Traded REITs and private equity funds in the investment of alternative CRE assets? * What does the macro-economic outlook mean for the investment potential of oil and gas offerings where are prices going? BDC offerings how strong are the credit markets? *Navigating the Burgeoning Non-Traded BDC Market: Key Take-Aways for Prospective Sponsors & Retail InvestorsThere are now around 14 Non-Traded BDCs from 11 sponsors and more sponsors are expected to enter the market shortly. What are the factors driving growth in this market? Are they set to continue? How many products can the market sustain?
* Understanding the key differentiators between Non-Traded BDC products Debt/equity and industry specializations * How do Non-Traded BDCs compare to traditional closed end credit funds and Traded BDCs for prospective sponsors? For retail investors? * What is the outlook for the credit markets? What will this mean for BDCs in 2016? * How do BDCs compare to other sources of finance for borrowers? * Where to be in the capital stack? * Originations vs. syndication: How important is it for a Non-Traded BDC to have an origination platform? * Master-feeder BDCs and multi-share class BDCs: Are they the future? How flexible is the BDC as a wrapper for an investment product? What opportunities and limitations does it pose for an issuer considering offering a BDC? What new product structures can we expect in the lead up to FRN 15-02? * How to evaluate a BDC? What are the key due diligence components? Valuation considerations? * How does the liquidity strategy for BDCs differ from REITs? Are BDCs better able to self-liquidate by letting the loans mature and simply distributing the proceeds to investors? Or is listing the ideal liquidity event for a BDC? What is the outlook for liquidity events next year? *The ABCs of Regulation A+ Offerings: A Guide for New Issuers & Broker/Dealers
* A brief overview of Regulation A+ - what it is and isnt * Tier I offerings vs. Tier II offerings * Who is the investor base? * Reg A+ vs. Reg D offerings for retail investors: How do they compare? * What product sponsors/product types are best suited to Reg A+ offerings? What are the pros and cons of Reg A+ offerings from the product sponsor perspective? * Timings, cost, required documentation, fees, structures, etc. * Fund raising instruments/platforms * Investor limits, qualifications and verification * On-going disclosure & financial statements * Liquidity events: Are Reg A+ offerings a stepping stone to an IPO? An alternative to an IPO? * Issuer due diligence and compliance obligations * Broker/Dealer due diligence and compliance obligations * Key federal and state securities law considerations *Dissecting 40 Act Interval & Closed End Funds & Assessing Their Place in a Retail Investors Portfolio TodayShould 40 Act interval funds be treated like an alternative or a mutual fund? Who makes a suitable retail investor? How do interval and closed end funds differ? How are they structured and what do they invest in? What are the nuances between the different products on the market? What are the risk/rewards? Due diligence and compliance considerations? How are such funds performing? These are just some of the questions that we answer as we dissect 40 Act interval and closed end funds and their place and value in retail investors portfolios as we head into 2016.Liquid Alternatives: Assessing the New Kid on the Block
* Defining the basics: What is a liquid alternative fund? What are examples of liquid alt products? * What are typical fee structures? * What is the business case to sponsor a liquid alt fund? Would Non-Traded REIT/BDC sponsors be cannibalizing their existing revenue streams? * What is investor appetite for liquid alt funds? Why should they choose a liquid alt fund over a Non-Traded REIT/BDC? * What is the broker/dealer perspective on liquid alts? Why/why not to add them to their shelves? * Notable liquid alt market trends * What can we expect from this market in 2016? *Assessing The Regulation D/Private Placement Market: The Good, The Bad & The In-Between
* Where does this market currently stand? Will 2016 finally be the year of new issuances? Why hasnt there been a rush to market to-date? Do Regulation D offerings/private placements have an image to overcome? * Regulation D as a way to seed a portfolio * Regulation D offerings vs Non-Traded REITs: How do they compare in terms of what product sponsors can/cant do? * Why sponsor a private placement over other alternative products? What are the risk-rewards? Costs? Timeframes and barriers to market entry? Valuation issues? * What are common product structures? * What makes a private placement attractive to retail investors vs. other alternative products? What are the risks for end-investors? What types of investor are private placements targeting and how? What has uptake been? What is their place in investors portfolios? Are they only for sophisticated investors? How to verify if investors are accredited? * What are the key issuer regulatory, due diligence and compliance hot buttons? Liabilities at the state and federal level? * How are Broker/Dealers viewing private placements? What are their key due diligence and compliance hot buttons? Liabilities? *Oil & Gas Investments: The Only Way is Up?
* OPEC sees a more balanced oil and gas market in 2016: What is the overall market outlook for the next 12 months? Notable market trends? Anything we can learn from the last downturn? What, in turn, does all of this mean for retail oil and gas investments in the short-medium term? * Non-Traded MLPs, royalty programs, drilling partnerships and 1031 exchanges: How have the different types of retail oil & gas investment programs fared during the current down market? Are there any clear winners and losers? * What investment opportunities does the down market create? * What place do oil & gas programs have in the retail investors portfolio today? What are the income tax benefits of such programs? * What are the key components of a successful oil & gas investment product? Red flags to watch for? What are the Broker/Dealer due diligence considerations? Investor suitability considerations? * Liquidity events *Closed Door Broker/Dealer SessionWe are pleased to offer independent retail broker/dealers, RIAs and family offices a confidential peer-to-peer open discussion forum. The following roundtable will enable participants to freely discuss issues at the top of their agenda. Participation is strictly limited to qualified attendees .To register and to submit discussion points, please email firstname.lastname@example.org. Submitted questions will remain anonymous.Multiple Share Classes? Daily NAV Products? Product Structure Consistency? What Sponsors Need to Do - & Not Do - to Meet Retail Investors Needs: Broker/Dealer & RIA PerspectivesWe are pleased to introduce this highly popular session from our June NYC symposium.The retail alternative investment industry has seen significant innovation in product structure in recent years. Such structures have been sponsors attempts to address concerns over perceived failings in legacy products, as well as to meet retail investor demand for greater returns and so further penetrate retail distribution channels. Such structures have had a varied reception from the IBD/RIA community. Following on from the earlier session on best in class product structures addressed from the sponsor perspective, this session focuses on the IBD/RIA viewpoint. Is there a disconnect between what product sponsors are offering and what Broker/Dealers and RIAs actually want for their retail investor clients? What are the key issues that Broker/Dealers and RIAs face in selling these new products? In this session we invite representatives from the IBD/RIA community to discuss what they see as the pros and cons of recent product innovation and what they would like to see from the sponsor community to further make products client friendly.Broker/Dealers & State Regulators: Working Towards Solutions for a Common GoalIn this panel we welcome representatives from the broker/dealer community and state regulators to jointly discuss key challenges within the retail alternative investment industry and how to work towards possible solutions. Among the issues discussed are:
- Suitability standards
- Concentration limits
- Product bias towards older investors