For Immediate Release
Rick Stoll, Assistant Vice President
Phone: 262-345-0566 | firstname.lastname@example.org
Milwaukee, WI – April 9th, 2018 –MLG Capital (“MLG”) is pleased to announce the results of its Registered Investment Advisor (“RIA”) private real estate survey.
During the first quarter of 2018, MLG Capital executives met one-on-one with RIAs throughout the United States, attended and hosted RIA events, and issued a written nationwide RIA survey to determine how the private real estate industry can better help RIAs meet their clients’ needs. Based on survey results as well as individual conversations over the years with 100+ RIAs, several clear trends emerged.
Our research uncovered a major overarching theme. Investors ask their RIAs about private real estate constantly. RIAs believe their clients should be invested in private real estate and they believe it has a low correlation to the public market. However, few are investing in it at present, primarily because they don’t know where to find information and/or have not seen the data, said MLG Capital CEO & Principal Timothy J. Wallen.
Key RIA survey findings include:
•93% of RIAs believe clients should have alternative investments within their portfolio.
• 80% of RIAs expect alternative investments to produce between a 5-10% return.
• 73% of RIA’s clients invest in real estate with real estate representing 29% of all alternatives investments listed (private equity, private real estate, hedge funds, oil/gas, other).
• If an alternative investment product would benefit a client, but the asset manager is not on the RIA’s platform, 80% would introduce the asset management to the investment committee and work to get them approved on their platform.
• 93% of RIAs are asked about real estate by clients at least quarterly.
• Only 27% of RIAs proactively allocate discretionary client funds to private real estate.
• Of those who proactively allocate, only 33% of RIAs assess an asset management fee.
• 93% of RIAs believe private real estate has a low correlation to the public market.
• 60% of RIAs prefer an asset manager in business for 10+ years.
• 73% of RIAs said they would be more likely to consider private real estate if clients received a 1099, which avoids multi-state tax returns and UBTI, vs. a K1.
• When asked if they believe private real estate has historical outperformed the stock market, 13% said ‘no and I have the data’, 20% said ‘yes, private real estate must have a position in my clients’ portfolios’ and 53% said some form of ‘I don’t know, never looked into it or don’t know where to find the data.’
Real estate has historically out performed stocks and bonds in inflationary, rising rate cycles. This looks especially likely today with P/E ratios around 24+ for the stock market. This is one reason we are proud to live and breathe real estate. Our goal, quite simply, is to provide the RIA community with the tools they need to make wise investment decisions for clients, said Wallen.
About MLG Capital Private Funds:
The series of MLG Private Funds were formed to acquire, directly or indirectly, a geographically diverse portfolio of commercial real estate. Primarily consisting of Commercial Class B multifamily properties, Industrial, Retail, Office, and other opportunistic opportunities located in strategically identified areas throughout the United States. View more about our latest fund by clicking here.
MLG Capital has been an active private real estate investor for over 30 years. We’ve acquired over $1.2B in assets (approximation of current value of assets owned + value of assets disposed), comprised of over 14.4 million square feet of space, 10,600+ multifamily apartment units, in multiple real estate asset classes, multiple geographies, and with multiple partners.
Past performance is never an indication of future results. As always be sure to complete your full due diligence on any investment. This is not an offer to sell a security or an interest in any offering being made by MLG Capital, or it’s affiliates and is intended to solely be a resource of thoughts, opinions, and materials to use in educational aspects of private commercial real estate investing.