The rules and regulations affecting alternative investments can be complex and constantly evolving, which is why national trade organizations like REISA are so important for helping alternative investment managers stay abreast of changes.
REISA keeps managers informed about what’s going on in their industry, and through education, networking and advocacy the organization works to maintain high ethical standards in alternative investing. And as alternative investments like non-traded REITs, real estate partnerships, and oil and gas interests grow in popularity, REISA does as well.
Equities caught up with REISA Treasurer Tony Chereso about REISA’s goals, how important it is for alternative investment managers to stay educated, and the keynote speakers at the company’s Annual Conference taking place at Caesar’s Palace on October 6-8.
EQ: What types of companies we can expect to be in attendance at the upcoming REISA conference?
Tony Chereso: There are four main categories of members that attend REISA conferences. They’re primarily geared towards independent broker-dealers, but you also have the product sponsors, the issuers of these alternative investment products, and they span the globe of non-traded REITs, business development corporations, energy programs, private real estate deals, some private equity deals, anything that falls into what I would call private, non-traded or non-listed types of investments.
And then you’ll have other industry participants which could include attorneys, CPA firms, support organizations like clearing firms, as well as the ancillary support firms. But the primary attendees at the conference will be the broker-dealers, the registered reps that sell the products, as well as the sponsors that issue the programs.
EQ: The REISA conference is focused on alternative investments, which have been gaining in popularity. I was wondering if you could tell us why you think alternative investments have become so attractive, and why people now seem to be so interested in them?
Chereso: I think the primary reason why alternative investments have gained some notoriety and momentum is really their non-correlation to the equities market. So you’ll see that they just don’t move with equities; they don’t move at all because they’re non-traded. Some of the programs are focused on core asset classes like real estate, which doesn’t change that frequently like the equities market does.
So you can get a traded REIT, which is volatile and is going to move with the equity markets, or you can also invest in in the non-traded REITs where you are going to have a fixed price. Granted, you won’t have a perceived transparency, but essentially the value of that underlying asset is not changing on a day to day basis. And so, I think attractive yields and non-correlation to the equities market are two primary reasons why you’re seeing a tremendous shift in allocation to these types of products.
EQ: What can an attendee of the upcoming conference expect?
Chereso: I’d like to think that there are two main things that we try to accomplish at the REISA. conference.
First and foremost is education. The conference is structured around tracks that are geared towards certain educational initiatives. For example on Sunday, there are several tracks that are broken down between advisers, broker-dealers, and sponsors. Each one is geared toward the different membership categories in order to help drive information specifically to those particular members.
As you get into Monday and Tuesday, there will be tracks focused on non-traded REITs, tracks focused on business development corporations, tracks centered on energy. The one called business development is geared towards marketing concepts and techniques to help advisers and broker-dealers build their business.
What we want to accomplish with the conference is to provide a lot of meaningful and dynamic content to the members in order to help them better sell these programs. The more educated they are, the more they will be able to embrace it, and the better able they will be to represent their products.
What you’ll also find is the sharing and networking, which is the second part. There’s the education, but there’s also a significant amount of networking that takes place. Individuals come together from all facets of this industry, whether it’s a broker-dealer, a registered rep who is meeting with your mom and dad around the coffee table talking about these investments, the sponsors, industry participants, the attorneys, and so forth, they’re all coming together to share ideas and best practices and standards. How can we better structure these programs, and how can we more efficiently bring these products to market?
EQ: Can you tell us about some of the keynote speakers who will be addressing the conference?
Chereso: Ironically, the company that I work for as the Chairman, House Greenlaw, actually in a previous life as an attorney represented both Ollie North and Grant Hill. Now, I’m not as familiar with Ollie North as I am with Grant Hill, but Ollie has a lot of information related to our industry, particularly with regard to the legislative and regulatory environment that we are operating in.
What people don’t realize about Grant Hill is that he’s got his own investment firm that he started. He has his own business development corporation, and he has a tremendous amount of investment in commercial real estate, either directly or through family investments. So he’s going to be talking a little bit about the discipline of sports and how that translates over to running his business. It also ties into our industry because he will be focusing on business development corporations and commercial real estate.
EQ: Is there anything else you would like to say about REISA?
Chereso: I’ve been involved with REISA and its predecessor for a long time. What we’ve determined as a path to success at these events is the increase in attendance and participation on the part of industry professionals. We want to bring together the thought-leaders in the industry to share and collaborate with each other. We are a large segment of the capital markets. Our product sponsors and our broker dealers play a significant role in generating capital for this industry, and what we have found is that these events have contributed to creating a dynamic where these industry participants come together and really collaborate on improving the quality of the product, and to set best-practices and standards for the benefit of investors as a whole.