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SEC Crackdown on Share Class Selection Abuses

by Jacob Mohs

Last week, the SEC enforcement division announced that it would take aim at advisor failure to disclose conflicts of interest related to receiving 12b-1 fees when lower-cost mutual fund share classes are available to clients. This Share Class Selection Disclosure (SCSD) initiative reflects the[...]

Filed Under: REITs, Legal and Regulatory, Interval Funds

Sector Outlooks (Q4 2017) Insights on Real Estate Sectors

by Caitlin McMahon

Each quarter, FactRight publishes sector insight reports regarding the various facets of commercial real estate. These sector insights help broker dealers and RIAs stay informed about the health of each commercial asset type, as well as assess which real estate-related alternative investment[...]

Filed Under: REITs, Real Estate, Market Research

SEC and FINRA Examination Priorities and Alts

by Brandon Raatikka

Last week, the SEC published its 2018 examination priorities. In January, FINRA published its 2018 examination priorities letter. Each year, we review both examination letters to determine how regulatory focuses may impact our clients’ alternative investment-related practices. Although neither[...]

Filed Under: Legal and Regulatory

Typical Fees and Metrics in DST Offerings

by Brandon Raatikka

So far in 2018, we at FactRight have been kept very busy reviewing DST offerings for our clients, including deals from new sponsors entering the market. Recent tax reform spared section 1031 exchanges for interests in real estate, and the industry breathed a sigh of relief, as it expects demand[...]

Filed Under: DSTs

Interval Fund Market Update

by Jacob Mohs

A robust pipeline of new interval fund registrations indicates continued growth is likely throughout 2018.  Total interval fund assets now exceed $23.8 billion. Total net assets for the sector grew 56% over the most recent 12-month period, to $19.9 billion. Although newly launched funds are[...]

Filed Under: Interval Funds

FINRA Set to Draw a New Line for Hybrid BDs

by Scott Smith

FINRA’s board took an unusual step at its December 2017 meeting that could have a big impact on alternative investment products.

Filed Under: Legal and Regulatory

Institutions Begin to Call on Retail Investor Next Door

by Jacob Mohs

It turns out that a lot of asset management firms that are thought of as “institutional” are increasingly focused on retail investors. 

Filed Under: REITs, Capital Markets

Q4 Caps Off Strong Year for Reg A+

by Brandon Raatikka

Things continue to look up for Reg A+. In the fourth quarter of 2017, the SEC qualified 25 Tier 2 offerings, which (just like last quarter) set new quarterly record. Of the Tier 2 140 offerings qualified since the end of 2015 (and not subsequently withdrawn or requalified), the SEC green-lit 62%[...]

Filed Under: Regulation A+

Tax Reform’s Effects on Real Estate Investment Programs

by Kemp H. Hanley

The passage of tax reform —the Tax Cuts and Jobs Act of 2017—will undoubtedly reduce the uncertainty that has weighed on commercial real estate investors as major tax proposals have been contemplated, which in and of itself is a benefit. Now that the final provisions are known, the Act has been[...]

Filed Under: Real Estate, Legal and Regulatory

Private Placements Explained: Part 5 (Key Risks)

by Russell Putnam

Let’s wrap up our five-post discussion of private placements by exploring some key considerations that often present risks in Reg D programs.

Filed Under: Due Diligence, Regulation D