What problem does access solve?
Insofar as many investment advisors primarily invest in public equity and fixed income, either directly or through funds, such advisors may be faced with situations where…
1. They are seeking investment opportunities for their clients outside of these markets and/or,
2. Their clients have asked them to invest their holdings beyond these markets.
Our research has shown us that RIAs have difficulty sourcing opportunities to invest in discrete alternative investments. This has led to situations where clients are typically left to their own devices to source such opportunities — requiring them to turn elsewhere, such as their personal networks or other potentially less reliable sources.
The access model, accordingly, may afford advisors the wherewithal to provide to their clients carefully curated, professionally managed, institutional-quality alternative investment opportunities. access offers discrete investment opportunities that have varying tenors, varying asset classes and varying return and risk dynamics. access’ utilization of best-in class vertical partners provides us with unique transactions and assets that previously were only available to institutional investors.
Why would an Investment Advisor want to invest in Alternative Investments?
Investment opportunities in alternative investments are typically sought:
- To provide diversification to financial portfolios.
- To procure enhanced returns to financial portfolios.
- To serve as a hedge against macro movements in the public markets.
An important impetus driving interest in alternative investment investing is the desire of investors, and the investment advisors who advise and manage investment portfolios, to diversify. The diversification of investment portfolios is a chosen goal to, among other things, provide protection from the vagaries of particular markets.
As well, alternative investments may provide investors with enhanced returns to their portfolios. access’ ability to curate the “best” transactions affords our clients the opportunity to see the most desirable transactions.
What type of alternative investments are offered by access?
While alternative investments can come in many shapes and forms – from commodities to hard (and soft) assets to hedge funds to venture capital – investors and advisors will find the types of alternative investments that access offers to be very attractive.
access’ alternative investment offerings consist of assets from a variety of asset classes that provide investors not only with current cash flow, residual value returns and, in some instances, tax benefits, but also investments whose fortunes have little direct correlation with the broader stock and bond markets.
Our individual investment offerings will have appropriate risk-adjusted returns from which an investor may choose. Each offering typically consists of discrete, identifiable assets with identifiable obligors. Our investment model contrasts with other models where asset opportunities are structured as blind pooled funds with no identifiable assets or credits – where the investor is totally dependent on the fund manager to make quality investments over an indeterminate period of time.
A useful way to look at the investment opportunities we offer is to think of them as a “hybrid” debt and equity investment. The “cash-on-cash” regular return component is very similar to a corporate debt obligation, like a bond. The value of the asset, at some disposition point, then, represents a return of the residual value with the potential for equity upside for the investor.
access is very careful to incorporate valuation assumptions and target returns that are conservative, and always seeks to surpass the initial targeted valuations. This is how our professionals have done business with an array of large institutions for over 30 years, and it is how we operate for access’ investors, and their financial advisors.
So, what might an access investment offering look like?
access will be offering interests in, for example, hard assets such as aircraft, railcars and other transportation assets, as well as assets in the infrastructure and real estate sectors. These assets will typically be on an operating lease to a credit-worthy lessee thereby providing the investor with current cash flow. At the end of the related lease term, the access– affiliated asset manager, working together with the industry-specific servicer of the asset, will take redelivery of the asset and dispose of it, thereupon recovering its residual value.
What are some of the salient features that commend access?
The members of the access team have originated, structured, and placed over $100,000,000,000 of these types of transactions with some of the largest institutional investors in the world over many decades. Advisors can also take comfort, from a risk mitigation standpoint, that access engages the services of industry partners, who are considered to be best-in-class managers/servicers in their respective industry segments or sub-segments. These partners not only help source investment opportunities for us, but also manage the transactions throughout the lives of the deals.
If the access model is interesting to you and you are interested in expanding the breadth of investment opportunities available for your assets under management, feel free to setup a call with our CEO, John Nozell , to learn more.