High net worth investors have a multitude of investment options to consider when addressing preserving and growing their hard-earned capital. From traditional public market investments (equities, fixed income, etc), to alternatives (private equity, private real estate, operating companies, etc), there are always opportunities to explore.
While private real estate investments (such as the funds offered by MLG Capital) may have many potential advantages over traditional public equity investments (our opinion!), private real estate investing isn’t for everybody. If any of these factors may apply to you, private real estate investing may just be a great consideration for your overall portfolio.
You’re looking for investments other than stocks.
The stock market has long been a dominant asset vehicle, but in an age of potentially high volatility, investors have been searching for alternatives to help them target diversification for their portfolio, potentially reduce volatility by seeking lower correlated investments to the public markets, capital preservation, and improve overall long-term capital growth.
While there are many alternative investments to choose from (private equity, venture capital, private placements, etc), investing in commercial real estate can be a powerful option for your investment objectives.
With a combination of positive cash flow and asset appreciation over time that fits in well with the objective of long-term capital preservation and growth, private real estate funds (such as those offered by MLG Capital) may be the best alternative to stock market investments.
You’re interested in real estate investment, but don’t have the time or expertise to go it alone.
Real estate investing can be a popular choice among high net worth investors. Perhaps you know of someone in your family or social circle who has had success investing in a commercial property.
While the skills it takes to build a successful business often transfer well to success in commercial real estate investing (much of the basic operations of a CRE asset overlap with operating business performance), there’s still a steep learning curve that will take time to master, not to mention coordinating and having established relationships within the space.
In addition, real estate is a “hands-on” business. You can hire a property management company to handle the day-to-day operations, but commercial real estate investing still requires time commitment, even if you’re not the one making the rent collection runs.
There is a way to have your cake and eat it too-investing in private real estate funds, or with an experienced private real estate manager. You can be a hands-off investor in a fund or individual (deal) syndication managed by seasoned professionals with the expertise, talents, and in-house sourcing abilities to make successful investments.
You’re looking for a vehicle to invest excess capital.
“What do I do with excess capital?” is a question on the minds of many successful business owners, and professionals alike.
You could reinvest in your business, but depending on the factors of your industry, this may not be fruitful. Your company may be fully scaled, with future growth bringing only marginal returns.
You could invest the excess capital into the public stock market, individual stocks, mutual funds, or bonds, etc., Given volatility and other market-risk concerns this may not be an attractive option.
Your third option could be alternative investments. This is especially true if your excess capital won’t be needed in the immediate future. If you have the capability to target substantial returns by utilizing a medium to long-term time horizon for investing excess capital, this meshes perfectly with the lock-up and holding periods of private real estate investment funds (such as those offered by MLG Capital).
Investing excess capital from your business into private real estate can help grow your portfolio and can help you diversify your assets beyond your operating business. In an age where the public market can move overnight, it can give you comfort to know all your eggs are not in the same basket and are not correlated to one another.
You’ve just experienced a liquidity event, and are asking yourself “what’s next”?
A liquidity event isn’t the end of the road for an entrepreneur: it’s only the beginning of the transition from active business owner to passive investor. The term “passive investor” is misleading, as it implies you simply kick back and let your money work for you.
“Putting your capital to work” is anything but passive. It requires you to take an active role, from building a team of attorneys, CPAs, and financial advisors, to determining your financial objectives and risk tolerance, to determining the strategies you will pursue to protect and grow your capital. Some say that “putting your capital to work” is MORE work than how you originally made your capital!
Private real estate investments can be a highly complimentative strategy to this new stage of your financial life. Offering you the opportunity to leverage the expertise, network, and track record of an established real estate investment company (such as MLG Capital), investing in private real estate funds is a strong vehicle for preserving and growing the proceeds from a liquidity event.
These are just a few of the signs pointing you toward private real estate investment. Perhaps other situations apply (for example, you may be a high-income professional such as an attorney or physician, and are looking for a vehicle to invest your excess income). If you are looking for an alternative to stocks, are interested in partnering with an experienced firm able to make the right investments, and have capital to put to work, investments in private real estate funds may be for you.