Friday, January 8th, 2021 and is filed under Industry Reporting
We recently released our December Private Placement Insights report. See the highlights from the report below, or if you are a Premium Reporting subscriber, log in now to see the entire report. If you don’t have access, you can request a free trial.
- Despite the COVID-19 related slowdown in Q2, AI Insight’s private placement coverage ended the year nearly on par with the record-setting 2019. The number of new private placements added to our coverage during the year was 2 fewer than 2019 (-1.00%), while aggregate target raise of $9.0 billion was roughly 8% less than the target in 2019. The 199 funds added in 2020 were offered by 75 separate sponsors.
- As of January 1st, AI Insight covers 167 private placements currently raising capital, with an aggregate target raise of $17.1 billion and an aggregate reported raise of $8.6 billion or 50% of target.
- Real estate-related funds, including 1031s, opportunity zones, and non-1031 real estate LLCs and LPs represent the largest component of our private placement coverage, at 75% of funds and 60% of target raise. Private equity/debt funds represent a relatively small amount of our coverage in terms of the number of funds at only 10%, but tend to be larger and represent 32% of aggregate target raise.
- In terms of our coverage by general objective, income is the largest component at 52% of funds, while growth and growth & income follow at 28% and 18%, respectively.
- The average size of the funds currently raising capital is $102.3 million, ranging from $1.9 million for a preferred offering to $3.0 billion for a sector specific private equity/debt fund.
- 76% of private placements we cover use the 506(b) exemption, 13% use 506(c) and 12% have not yet filed their Form D with the SEC.
- 55 private placements closed in December (higher than average primarily due to the closing of all open conservation funds), with roughly 66% of those reporting a raise meeting or exceeding their target raise. 209 private placements closed in full year 2020, having been on the market for an average of 299 days and reporting they raised 71% of their target on average (of those that reported). 70% met or exceeded targets, and only 12% were able to raise less than half of their target. 11 funds did not report a raise.
- Seven private placements suspended offerings and one terminated due to uncertainties related to COVID-19.
- ON DECK: as of January 1st, there were seven new private placements coming soon.
Access the full Private Placements report and other hard-to-find alts data
AI Insight’s Industry Reporting capabilities help you review alternative investment trends and historical market data for Private Placements, Non-Traded REITs, Non-Traded BDCs, Interval Funds, and Alternative Strategy Mutual Funds. Receive up to 24 extensive reports per year to help broaden your alternative investment reviews.
Log in or subscribe to AI Insight to further research, sort, compare, and analyze all of the private and public funds in our coverage universe. See who’s new in the industry and what trends are impacting the alts space.
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Chart and data as of December 31, 2020, based on programs activated on the AI Insight platform as of this date.
Activated means the program and education module are live on the AI Insight platform. Subscribers can view and download data for the program and access the respective education module.
On a subscription basis, AI Insight provides informational resources and training to financial professionals regarding alternative investment products and offerings. AI Insight is not affiliated with any issuer of such investments or associated in any manner with any offer or sale of such investments. The information above does not constitute an offer to sell any securities or represent an express or implied opinion on or endorsement of any specific alternative investment opportunity, offering or issuer. This report may not be shared, reproduced, duplicated, copied, sold, traded, resold or exploited for any purpose. Copyright ©2021 AI Insight. All Rights Reserved.
Tuesday, December 22nd, 2020 and is filed under AI Insight News
AI Insight CEO Sherri Cooke discusses her key reflections for 2020 including how alternative investments played an important role in portfolios and the impacts of Reg BI. She also shares what’s anticipated in 2021. Read the narrative below or listen to the podcast here.
Sherri formed AI Insight in 2005 with the primary goal of providing the financial planning community with a more efficient and consistent way to access factual information on alternative investment programs – and from that vision the AI Insight database was born.
Q: What are some of the key reflections you have about 2020 and some points of interest for the coming year?
SC: I would say as a ADISA Board member, I was fortunate to be able to spend quite a bit of time this year collaborating with others in the alternative investment industry focusing on some of the things we can do to make the industry better – and to increase the awareness and understanding of these products within a growing audience. I believe we all have to work together to bring this space to a whole new level. Also, as Reg BI requirements continue, we’re looking at ways to partner with compliance and technology workflow companies that are helping to support these needed processes. We’re also looking to connect with other companies – both inside and outside the traditional alternatives space to further increase consistency and transparency in the industry with an ultimate goal of making it easier to conduct alts business.
Q: How do you think alternative investments played an important role in portfolios this past year, especially given the pandemic?
SC: We’re always looking for ways to give more to people – who are of course qualified – access to alternative investments to help them really diversify their portfolio in a meaningful way. Our belief is that a person isn’t fully diversified if all of their underlying investments are either in some way tied to the markets or are invested in a fixed income security – which is effectively still tied to the market.
Despite the pandemic – and in some cases as a result of – there are a lot of really solid opportunities to invest in real assets, interesting investment structures, and institutionally supported opportunities through alternative investments that really provide true diversification.
That said, alternatives can certainly be complex and they need to be factually understood and appropriately sold. This industry really needs to educate financial professionals and investors in so many different ways. One of those has to be around creating realistic expectations about what these investments are intended to bring to a diversified investment portfolio…and what they are not. Stocks lose value all the time and there will be alts that don’t perform. As an industry, we really need to do our very best to ensure that these products are properly sold and positioned within client portfolios. And – as with all investments – we support conducting the best possible research and diligence to allow firms and advisors to select best of class – and help the vested financial firms and producers drive product sponsors toward best of class practices.
Q: We know that compliance is often an issue for advisors in considering alternative investments – and regulatory scrutiny continues to increase. The SEC’s Regulation Best Interest implementation took place on June 30. How does AI Insight help streamline Reg BI requirements?
SC: Compliance is one of the things that motivated me to create AI Insight in the first place. I wanted to build capabilities to facilitate due diligence and proper compliance along with education and documentation of these efforts when selling complex products – those products that the regulators have called out as needing heightened supervision or training.
From an audit perspective, we’ve found in any situation of which we’re aware with our clients, if a firm has stayed up-to-date on the requirements around selling different types of investments – and makes sure everyone involved is aware of their obligations, adheres to the processes, and documents their efforts – then the regulators are generally satisfied. If you fail to make these efforts up front and you’re inconsistent in how you conduct your business from a compliance perspective….you’re just leaving yourself open to trouble.
Reg BI – within the BD community – and I think even though the fiduciary standard has always applied RIA space – we’re going see a whole new layer of extra scrutiny in this regard. The processes that have been central to our platform for years can help support Reg BI requirements and help financial firms and professionals demonstrate the “good faith and reasonable efforts” that Reg BI requires on an ongoing basis. Specifically, we’ve created a comprehensive Reg BI Guide that steps through the Compliance and Care Obligations and correlates the AI Insight support resource to that particular SEC requirement. Again, this is just another way that we help to create efficient and consistent educational and compliance workflows that can help firms at both the product and the firm level.
Q: What is your focus for 2021?
SC: From a business owner’s perspective, ensuring that our team and our product continues to maintain consistent integrity of value and exceptional service; this is the backbone of our business – and making sure that our AI Insight team is challenged and fulfilled in their roles within our company.
From an industry perspective – we believe that there is a tremendous amount of value for advisors to differentiate themselves and bring really great opportunities through the thoughtful and diligent understanding of alternative products. We provide this value by building and bringing together our network of broker-dealers, advisors, RIAs, alternative investment firms and industry partners. Therefore, as in past years, I am always grateful for how far we’ve been able to come and to everyone who has helped us be successful in our efforts to support this industry – and I look forward to working with all of our business partners to explore new possibilities and find what more we can bring to the table for our customers in the new year.
Tuesday, October 6th, 2020 and is filed under Industry Reporting
We recently released our September Private Placement Insights report. See the highlights from the report below, or if you are a Premium Reporting subscriber, log in now to see the entire report. If you don’t have access, you can request a free trial.
- Private placement fund activity ramped up in September, with more funds added to our coverage in the month than any since March. 19 new funds were added in September, led by 1031s, energy, and non-1031 real estate.
- As of October 1st, AI Insight covers 177 private placements currently raising capital, with an aggregate target raise of $17.1 billion and an aggregate reported raise of $8.4 billion or 49% of target.
- Real estate-related funds, including 1031s, opportunity zones, and non-1031 real estate LLCs and LPs represent the largest component of our private placement coverage, at 72% of funds and 60% of target raise. Private equity/debt funds represent a relatively small amount of our coverage in terms of the number of funds at only 9%, but tend to be larger and represent 27% of aggregate target raise.
- In terms of our coverage by general objective, income is the largest component at 52% of funds, while growth and growth & income follow at 29% and 18%, respectively.
- The average size of the funds currently raising capital is $96.8 million, ranging from $3.5 million for a single asset real estate fund to $2.8 billion for a sector specific private equity/debt fund.
- 76% of private placements we cover use the 506(b) exemption, 15% use 506(c) and 10% have not yet filed their Form D with the SEC.
- 11 private placements closed in September, with all either meeting or exceeding their target raise. 120 funds have closed year-to-date, having been on the market for an average of 333 days and reporting they raised 62% of their target on average.
- Seven private placements suspended offerings and one terminated due to uncertainties related to Covid-19.
- ON DECK: as of October 1st, there were seven new private placements coming soon.
- Listen to the companion podcast for this blog.
Access the full Private Placements report and other hard-to-find alts data
AI Insight’s Industry Reporting capabilities help you review alternative investment trends and historical market data for Private Placements, Non-Traded REITs, Non-Traded BDCs, Interval Funds, and Alternative Strategy Mutual Funds. Receive up to 24 extensive reports per year to help broaden your alternative investment reviews.
Log in or subscribe to AI Insight to further research, sort, compare, and analyze all of the private and public funds in our coverage universe. See who’s new in the industry and what trends are impacting the alts space.
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Chart and data as of September 30, 2020, based on programs activated on the AI Insight platform as of this date.
Activated means the program and education module are live on the AI Insight platform. Subscribers can view and download data for the program and access the respective education module.
On a subscription basis, AI Insight provides informational resources and training to financial professionals regarding alternative investment products and offerings. AI Insight is not affiliated with any issuer of such investments or associated in any manner with any offer or sale of such investments. The information above does not constitute an offer to sell any securities or represent an express or implied opinion on or endorsement of any specific alternative investment opportunity, offering or issuer. This report may not be shared, reproduced, duplicated, copied, sold, traded, resold or exploited for any purpose. Copyright ©2020 AI Insight. All Rights Reserved.
Monday, June 8th, 2020 and is filed under Industry Reporting
We recently released our May Private Placement Insights report. See the highlights from the report below, or if you are a Premium Reporting subscriber, log in now to see the entire report. If you don’t have access, you can request a free trial.
- Private placement fund formation has slowed in the wake of COVID-19. Eight new private placements were added to our coverage in May, roughly half of the monthly level we’ve seen on average over the last few years. The first few months of 2020 were strong but with the slowdown in May, we are now flat in terms of new funds added to over coverage year-over-year and down modestly in aggregate target raise.
- The slowdown was most visible in the 1031 category, where only four new funds were added to our coverage in May compared to well over double digit additions for the last several years. This may be partially due to a slowdown in real estate transactions overall as well as a lack of confidence in valuations. Also, fewer highly appreciated properties are being sold right now, which reduces the demand for 1031 exchanges at least in the near-term. The consensus in the industry is that demand will accelerate once transaction activity resumes and valuations are more reliable.
- We are seeing more activity this year in preferred securities and private equity/debt funds, and we are also starting to see sector-specific opportunistic funds ramp up in the wake of the COVID-19 market disruption. Opportunity zone (QOZ) funds, which had paused for several months, are back on track with three in the queue to be added to our coverage soon. Recent events around the US could continue to highlight the importance of QOZ strategies.
- As of June 1st, AI Insight covers 171 private placements currently raising capital, with an aggregate target raise of $16.6 billion and an aggregate reported raise of $8.3 billion or 50% of target. The average size of the current funds is $97.0 million, ranging from $3.5 million for a single asset real estate fund to $2.7 billion for a sector specific private equity/debt fund.
- 14 private placements closed in May, having raised approximately 52% of their target and having been on the market for an average of 336 days.
- Five private placements suspended offerings due to uncertainties related to COVID-19.
- ON DECK: as of June 1st, there were four new private placements coming soon.
Access the full Private Placements report and other hard-to-find alts data
AI Insight’s Industry Reporting capabilities help you review alternative investment trends and historical market data for Private Placements, Non-Traded REITs, BDCs, Closed-End Funds, and Alternative Mutual Funds. Receive up to 24 extensive reports per year to help broaden your alternative investment reviews.
Log in or subscribe to AI Insight to further research, sort, compare, and analyze all of the private and public funds in our coverage universe. See who’s new in the industry and what trends are impacting the alts space.
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Chart and data as of May 31, 2020, based on programs activated on the AI Insight platform as of this date.
Activated means the program and education module are live on the AI Insight platform. Subscribers can view and download data for the program and access the respective education module.
On a subscription basis, AI Insight provides informational resources and training to financial professionals regarding alternative investment products and offerings. AI Insight is not affiliated with any issuer of such investments or associated in any manner with any offer or sale of such investments. The information above does not constitute an offer to sell any securities or represent an express or implied opinion on or endorsement of any specific alternative investment opportunity, offering or issuer. This report may not be shared, reproduced, duplicated, copied, sold, traded, resold or exploited for any purpose. Copyright ©2020 AI Insight. All Rights Reserved.
Tuesday, May 5th, 2020 and is filed under AI Insight News
AI Insight’s Mike Kell, senior vice president – business development and program management, recently participated in an ADISA panel discussion regarding investment considerations during COVID-19. Panelists included moderator Lilian Morvay, principal and founder of Independent Broker Dealer Consortium, LLC (“IBDC”), along with Michael Schwartzberg, founding partner, Winget Spadafora & Schwartzberg; Gary Saretsky, founding partner, Saretsky Hart Michaels + Gould; Sheri Pontolillo, founder and director of InterWeb Insurance; and Bob Valker, managing director, Capital Forensics.
Following are some of the highlights of this discussion, including several helpful and actionable risk management best practices.
- Arbitration claims increase in times of market dislocation. There’s no reason to think this time would be any different so its important to be prepared.
- According to a recent Financial Advisor article, the Pandemic has driven 1 in 4 Americans to reach out to a financial advisor for the first time.
- Being proactive with existing clients is especially important but there’s also a good opportunity for prospective clients as well to protect your own business.
- Support your clients and your business by connecting people. For example, bring together a family you work with to put together a plan to support a specific cause or community need. This may allow you to talk with younger relatives, parents, or heirs. Neighbors may want to come together.
- It’s a chance to lead and connect yourself with people around you. Positive for the community and business.
- Best practices for market dislocations: Review all alternative products in your book and:
- Understand exposures.
- Take a hard look to ensure the proper due diligence was and is being done on an ongoing basis.
- Documenting the due diligence.
- Be aware of potential areas of risk (triage your risk) including but not limited to:
- Concentration
- Elderly clients with exposure to alts
- Review the investment rationale, objectives, risk tolerance, paperwork, and ensure documentation is in place for all alternative investment decisions. Ensure that actions are backed up with verifiable data.
- Ensure that you are taking the responsibility for analyzing your own business and knowing your risk. Don’t wait for attorney. Start now.
- With more remote work, review your E&O insurance to ensure you are fully covered. Determine if cyber-security coverage is needed and that you have the appropriate technology in place.
- Effective communication is critical, especially in times like this where there is fear and anxiety. Respond to the emotional concerns. Three suggestions for communications:
- Get on the phone, call clients, do not avoid this. It’s not fun but silence will cause feelings to magnify. Acknowledgement helps to diffuse anxiety. In many ways, this market dislocation helps to highlight the benefit of alternatives and takes the argument against them away. It’s tougher to highlight alternatives when all market indexes are outperforming them. That’s not the case now.
- Don’t wait to communicate, do it now, immediately.
- Do it right. Listen to concerns but listen to what is not said. This is an amazing opportunity to really flesh out the true risk tolerance of clients and bring it to light. It might be painful, but it is helpful.
- Phone calls are the best approach for communicating.
- Texting is mostly prohibited and e-mail can be misinterpreted.
- Phone calls are typically the best approach for communicating, and then confirm in writing or e-mail something verifiable from the conversation.
- Firms may still have a small pocket of exposure in recent sales (ie: those who purchased them just prior to suspension), but big picture down the road this will be helpful.
- Firms should have a documented rationale for suspensions or other offering actions.
Click here to watch the full replay.
Thursday, April 23rd, 2020 and is filed under AI Insight News
We recently hosted a webinar titled “COVID-19 Impact and Outlook, Alternative Investment Markets.” We were joined by three incredibly insightful speakers:
- Randy I. Anderson, Ph.D., CRE, President of Griffin Capital Asset Management Company
- Robert Hoffman, CFA, Managing Director, FS Investments
- Richard Kimble, CFA, Portfolio Manager, Americas for the Nuveen Global Cities REIT
See the key takeaways from our discussion with them as well as due diligence action steps provided by Mick Law, PC, or watch the full replay here:
Richard Kimble, Nuveen
- Real estate asset classes with shorter leases will suffer the most:
- Hospitality, seniors housing, student housing, discretionary retail
- Development will struggle
- Some retail will close for good
- Industrial, non-discretionary retail, and housing are in a better position:
- Multifamily and single-family rentals, life-sciences, technology (towers, data centers)
- Housing still has demographic trend benefits and now may be more difficult to own.
- US will continue to be a safe haven for overseas investors. Manhattan will still be a focus, but some groups may look to diversify to other large US cities.
- Real estate transactions are down:
- Of the deals awarded pre-crisis, some have gone through with purchases thinking this will be shorter-term V-shaped recovery, some backed out, and some pushed out 30-60 days to see if underwriting needs to be modified.
- Transactions slowing down but once there’s normalcy there will be a lot of transactions.
- It is critical to use well-known and trusted valuation firms to properly assess risk:
- They are using one of the largest third-party valuation firms that works with a number of clients and work with other appraisers similar to them to make sure the market is being consistent.
- Making sure people are consistently pricing in risk is key.
- For their fund, normally a third of the portfolio is appraised each month but during times like this they can appraise earlier.
- In Nuveen’s real estate platform, they have collected 94% of April rent.
- A handful have asked for payment plans and they are using creative strategies that can be used to ease the pain of the deferred rent.
- Not really working through force majeure because this doesn’t qualify for it or other MAC clauses, non-essential retail clients are struggling the most, but they want to be part of the solution to help make sure as many companies stay in business and keep as many employees – not abating rent but helping to defer.
- For example, many retailers asking for deferral for the next couple of months. They can work with tenants to amortize or add on to the end.
- They have set up a task force with a hotline to help small businesses access funds to stay in business.
- The real estate markets are in a stronger place than back in the global financial crisis (the GFC).
- For example, CMBS issuance 2017-2019 was less than half 2006-2007 time period. There is more discipline in lending, looking at in-place cash flow vs. forward looking NOI, more equity in transactions.
- Before COVID-19, they were maybe losing deals on the lending side due to pricing and structure or relationship, whereas before the GFC it was because other guy was giving more leverage. Covenants have also held up versus covenant lite environment pre-GFC.
- Looking at where traded REITs are now relative to NAV, and where spreads are, we’re seeing tremendous opportunities.
Robert Hoffman, FS Investments
- High yield bond markets will see volatility, defaults, downgrades, lack of CLO issuance, and fallout from the energy markets.
- Defaults may hit 10% later this year, compared to mid-teens in the GFC.
- Corporate bonds have proven to be resilient.
- There’s never been two years in a row that the HY debt market has been negative.
- When looking at the history of the high yield bond markets, when spreads are as wide as they are now, or around 800bps, the median 12-month forward return is 26%.
- This is probably not the time for broad, passive allocations, but the volatility creates opportunities.
- There will be volatility, but there are positives:
- The speed to which the Fed came into the market with the stimulus packages is helping the markets work more normally so risk can be properly priced and help speed the recovery.
- It also helps with resolving debt issues, if defaults or other actions can be worked out in a properly functioning market it lessens the impact.
- Public markets are seeing issuance and liquidity.
- Debt is more expensive and more situational but its moving.
- The fifth largest deal occurred last week amidst the pandemic.
- On the private debt side, most firms use reputable third-party valuation firms to mark to market as best and consistent as they can similar to real estate and there is also an analogous public market as an indication of value.
- Debt markets were so strong coming into this, and there is a fair amount of dry powder.
- Funds are more properly leveraged and have built up cash and been more defensive even prior to COVID-19.
- Most managers are taking care of their own book first, working with borrowers, and then will look to be opportunistic.
- Real estate debt is also in a better position than it was going into the GFC.
- Debt service coverage ratios are better than before, LTVs are more appropriate.
- Every downturn is different, but lenders are in a better position going into this.
- On the corporate debt side, there’s a much greater prevalence of covenant lite than pre-GFC:
- It remains to be seen what impact this has on the market and this could prove challenging.
- Covenant-lite loans recovered better than covenant-heavy post GFC but not sure that will happen again with significant weakening of fundamentals.
- Another factor that could be a challenge is a large shift to lower rated issuers from higher rated, and a higher percentage of loan-only Single B issuers as opposed to those issuing a loan and bond. However, ratings are higher than ever in history in the high-yield market and asset coverage is stronger than ever which may offset challenges.
Dr. Randy Anderson, Griffin Capital
- There will be volatility and the full impact depends on how long the virus takes to work its way through
- In this downturn as opposed to the GFC, two of the three legs of the chair are stable – fiscal (stimulus packages) and monetary (interest rate reductions) are a positive.
- The virus is the third leg and is variable. There is reason to be optimistic about a recovery in Q3 2020 but more likely in Q4.
- The IMF is forecasting the US economy to be down 6% 2020 and then stronger in 2021, up 4.7%.
- Markets have stabilized recently as the majority of the fear has been priced in.
- Many managers were already somewhat defensive going into this based on high real estate prices and low cap rates.
- They were expecting slower GDP growth anyways and were focused on defensive sectors including multifamily and industrial and had increased liquidity.
- Like Nuveen, they are seeing high levels of collections on multifamily. People need a place to live.
- Public REIT markets overreacted by a factor of almost 3 times during the GFC and proved to be a great investment post GFC.
- The forecast for real estate over the five to seven-year period hasn’t change, with 4-6% income and a similar amount based on appreciation based on inflation rates. With bumps and volatility. No one makes money trying to time the bottom.
- They have employed low leverage and lines of credit were not drawn (similar across many managers), so now they can take advantage of opportunities.
- May take some time to accurately price in risk, but most managers use highly competent third-party valuation experts who follow standards that are widely adopted. The standards require them to look at all conditions and fairly reflect those values.
- One of the main things investors can be looking at is if managers have unfunded commitments.
- It may be harder to raise capital in this environment, so you don’t want to have many outstanding unfunded commitments.
- Also want to have enough cash on hand, liquid securities if it is possible in fund structure, and lines of credit.
- It is important to play defense and then you also want to be positioned to play offense, when the third leg the virus starts to mitigate then markets will start to move and you want to be able to accretively acquire.
Due Diligence Action Steps (Provided by Mick Law, PC)
- Monitor for status updates for funds you have exposure to.
- Monitor for any suspensions of an offering, share redemptions, or distributions (AI Insight Alerts) and immediately communicate to investors.
- Proactively communicate the potential.
- Questions to ask sponsors in your discussions with them include have they:
- Taken any proactive measures to protect asset value?
- Adequately providing “specific information” to investors in offering materials and public filings about how COVID-19 “currently” affects, and may reasonably effect in the future, the operations and liquidity of such sponsors and their managed investment programs? The SEC has advised that it intends to monitor how companies are communicating with their investors concerning the effects of COVID-19.
- Able to service its debt and any portfolio debt?
- Able to continue operating without syndicating additional offerings in the short-term? (review financials)
- Adjusting their distribution payment policies appropriately to account for the present and future effects of COVID-19?
- For oil/gas sponsors that use reserve-based lines of credit,
- Are they appropriately prepared to address borrowing base deficiencies and related loan repayments in the probable event that their credit limits are adjusted due to lower commodities prices?
- For qualified opportunity fund (“QOF”) sponsors with identified asset funds,
- What adjustments are they having to make to development timelines?
- Do they still anticipate being able to meet the 30-month timeline to have their capital invested?
- If not, are they reserving money to pay any potential penalties?
- For QOF sponsors with partial or complete blind pool funds,
- What percentage of capital is already committed to projects (i.e., do they have capital available to take advantage of declining asset prices)?
Friday, March 27th, 2020 and is filed under AI Insight News
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Your daily routine may be in disarray, but it’s business as usual at AI Insight since we have been successfully operating as virtual company for many years. As always, we’re here to help you with your AI Insight needs and anything else that might help you when working remotely.
To be successful working remotely, you need a strategy, focus and a little fun. We’ve compiled some resources that we’ve used in practice to help you accomplish this. |
Get Started
It’s important to designate a specific area that you use solely as your workspace to establish your “work zone” not only for your benefit, but for family members who are at home with you. Traveling around your house with your laptop or working where you sleep invites interruption.
Stay Focused
It’s easy to become distracted by the TV, social media or the pile of dishes in the sink. Creating a schedule for yourself – including breaks and lunchtime as you would at the office – can help you concentrate on your work. Setting a specific work schedule will also help you set expectations for other family members who are at home and help you keep a healthy work-life balance.
Industry Resources
You may be used to attending industry conferences or face-to-face group meetings, which have been postponed or cancelled. AI Insight created a central resource to help you stay connected with industry groups such as ADISA, IPA, FINRA and more. Check back frequently as we will continue to post industry webinar events happening in lieu of conferences.
Technology Resources
Having the right equipment is essential to working from home. But, knowing how to make the most of technology tools can be challenging.
- Zoom is a remote video conferencing and web conferencing service.
- Microsoft Teams is a unified communication and collaboration platform that combines workplace chat, video meetings, file storage, and application integration.
Stay Connected
We all know that miscommunication can happen over email and text. Convey your tone with a phone call instead of email when you can. Even better, turn on your video during online meetings to express your body language. Remember to test out your video feature before you use it publicly, so you can check your background surroundings and test your microphone.
This is also a good opportunity to get to know your co-workers on a personal level. At AI Insight, we’ve created a social channel within our Microsoft Teams platform to talk about topics unrelated to work and share photos on occasions like Halloween and St. Patrick’s Day. This helps us get to know each other better and stay connected.
Be Mindful
We’ve created a “Get Up & Move” rewards program at AI Insight to encourage everyone to walk away from their computer once an hour. We also host quarterly Lunch & Learns to help our team stay healthy in mind and body such as chair yoga sessions and meditation practices. Taking breaks can boost productivity and rejuvenate you when motivation drops.
Contact Us
From everyone at AI Insight, we want you to be safe and healthy. Again, we’ve been incorporating these practices for many years. If there’s something we can help you with on any of these topics, please reach out to us Monday through Friday from 8:00 a.m. to 6:00 p.m. at 877-794-9448 ext. 710 or any time at customercare@aiinsight.com.
Tuesday, June 12th, 2018 and is filed under AI Insight News
It was great to connect with many of our industry partners at the recent FINRA Annual Conference in Washington, D.C. to discuss regulatory topics relevant to our industry. Here are three key takeaways to consider:
- The industry continues moving forward with a new approach to the standard of care registered representatives must undertake when working with clients. SEC Chairman Clayton was adamant about having industry stakeholders submit comments to help shape the actual outcome of the proposal. He was also quite vocal on the confusion people seem to have around the term “fiduciary” and that he was very much against using it in this proposal. The SEC’s Brett Redfearn provided an overview of Regulation Best Interest and enhancing the standard of conduct for broker-dealers. Read more
- On a suitability panel, “inadequate training relative to products and risks” was noted by FINRA as a common weakness found.
- Heightened diligence and advisor education are needed for the increasingly complex products being offered through traditional ’40 Act structures such as Alternative Mutual Funds and Interval Funds. FINRA mentioned their guidance on complex products as a resource when working with Alternative Mutual Funds, leveraged ETFs, Interval Funds and other alternative investments.
Tuesday, December 19th, 2017 and is filed under AI Insight News
As 2017 comes to a close, AI Insight CEO Sherri Cooke reflects on the past year and looks forward to what’s coming up in 2018.
Q: What are some of the key reflections you have about 2017 and some points of interest for the coming year?
SC: This year we increased the number of RIAs using the AI Insight platform, so I’m glad that we’re able to support RIAs as this channel continues to grow. We look forward to continuing to expand these relationships in 2018. We also made significant upgrades to our AI Insight Education Module functionality, and we’ve received a lot of positive feedback on the updates. We’re always working to make the platform easy to use and add more valuable capabilities.
One of the most exciting highlights as we close out 2017 is the fact that we will be launching a new feature with expanded alternative mutual fund research capabilities in the new year. Advisors will be able to compare the details and financial performance of alternative investment mutual funds with reporting and documentation features our subscribers have come to rely on for more traditional Alternative Investment research. We’ve just hired Lucas Johnson who was a due diligence analyst with National Planning Holdings, Inc., where he specialized in due diligence reviews of liquid alternatives and other alternative investments. He’ll be stepping in to help launch our liquid alternative research program. You’ll see much more about this in the first quarter.
From an industry perspective, there’s been a bit of a relief relative to the DOL Fiduciary Rule implementation date, yet it doesn’t change the focus on compliance and regulatory scrutiny. The continued market run is remarkable, to say the least, inspiring growth and confidence. But that kind of house-of-straws confidence can increase concern about the negative consequences of a potential market correction. Smooth or bumpy, it’s our commitment to help advisors and clients manage the environment no matter what 2018 may bring.
Q: What are some of the major misconceptions you see that advisors have about alternative investments?
SC: A couple of misconceptions come to mind. The first would be that illiquidity or alternatives are intrinsically inferior planning tools. Another would be the challenges around compliance and regulatory scrutiny.
Q: Ok – let’s address the liquidity issue first.
SC:
I don’t believe that liquidity is the true issue. If a client’s portfolio is well diversified including appropriately positioned liquid and illiquid investments, then the illiquidity can actually be a true positive. It can prevent clients from selling investments when their motivation is emotionally-driven or reactive to the market.
Second, some people use the generalized claim that alternatives haven’t performed well over the last several years. As with all securities, some do well and some do not – and as with other investments there have certainly been a share of alternatives that haven’t performed as expected. However, there are a lot that have performed well when diligence has been taken in selecting and vetting – and they have been sold correctly. If a key goal is for alts to be used as a portfolio stabilizer, then we wouldn’t have seen them stand out during the crazy bull markets we’ve experienced. That’s not one of their key purposes. Many advisors want a significant premium for the illiquidity, but I don’t believe you should expect to get both the downside market protection in a bear market and returns that exceed the average in bull markets from the same vehicle.
It’s a challenge for me when I hear the expectation of alts always having to perform. Stocks lose value all the time. It really comes down to making sure these products are properly sold and positioned within client portfolios; and – as with all investments – conducting the best possible research and diligence to select best in class.
Q: You mentioned compliance – we know that compliance is often an issue for advisors in considering alternative investments and regulatory scrutiny continues to increase. What is your experience with compliance issues?
SC: Compliance is one of the things that motivated me to create AI Insight in the first place. I wanted to build capabilities to facilitate due diligence and proper compliance along with education and documentation of these efforts when selling complex products – those products that the regulators have called out as needing heightened supervision or training.
From a company perspective, we have found in any situation of which we’re aware, if you stay up-to-date on the requirements around selling any type of investment – and make sure everyone involved is aware of their obligations, adhering to the process, plus documenting all efforts – then the regulators are generally satisfied. That’s been our experience with our clients and their audits.
If you fail to make these efforts up front and you’re inconsistent in how you conduct your business from a compliance perspective, you’re just leaving yourself open to trouble from a client who ends up unhappy about something or getting in the news for the all the wrong reasons.
Q: You are involved in mentoring young women in the financial industry. Tell us about it.
SC: A group of members of the Investment Program Association (IPA) formed the Women’s Initiative Network (WIN). One of our key goals has been to help promote and support women within the financial services industry, which traditionally has been very male-dominated. I launched our first local initiative with Ohio State University’s Fisher School of Business this past year. We had a group of young women who had an interest in Financial Services get together once a month to hear stories about the journeys of women in our area who have been successful in the financial world.
We talked through some of their concerns and real-life challenges they’ve encountered or that we, as mentors, have experienced. We also introduced them to many unknown and non-mainstream facets of the investment world, which was really exciting.
Q: What is your focus for 2018?
SC: From a business owner’s perspective, ensuring that our team and our product continues to maintain consistent integrity of value and exceptional service; this is the backbone of our business – and making sure that our AI Insight team is challenged and fulfilled in their roles within our company.
From an industry perspective – we believe that there is a tremendous amount of value for advisors to differentiate themselves and bring really great opportunities through the thoughtful and diligent understanding of alternative products. We provide this value by building and bringing together our network of broker-dealers, advisors, RIAs, alternative investment firms and industry partners.
Therefore, as in past years, I always look forward to working with our business partners to explore new possibilities and find what more we can bring to the table for our customers in the new year.
As I’ve already mentioned, I’m excited about developing even more education and support in the liquid alternatives space. These funds are gaining increased awareness from a due diligence and compliance perspective. We currently have education and training for 30 closed-end funds available on our platform and expect to see real growth in this area in the coming year. We’ve expanded our CE course offerings to include a FINRA alternative mutual fund course and a course on interval funds. Plus, we’ve recently published a comprehensive white paper called, “Understanding the Complexities of Liquid Alternatives” to help support these growth plans in 2018. I’m really proud of our efforts when it comes to education on key industry initiatives and concerns, so we are particularly excited about the new plans around the liquid alts sector for the coming year. It’s important to our entire team that we continue to do our very best to evolve with the industry – hopefully always a few steps ahead of the primary curve – to bring our customers what they need to confidently offer their clients a full and rich palette of investment solutions. That’s our goal for 2018…and every year after!
Sherri Cooke is the CEO and founder of AI Insight, Inc. and has been in the financial services industry for over 25 years. Cooke formed AI Insight in 2005 with the primary goal of providing the financial planning community with a consistent database of alternative investment programs.
Tuesday, May 13th, 2014 and is filed under AI Insight News
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