Blackstone's Choice: Let BREIT Crash or Collapse It Slowly?
(Dec 2022)
By Craig McCann and Regina Meng.
Introduction
Last week, Blackstone Real Estate Income Trust ("BREIT") announced that it was not going to honor redemption requests from investors in excess of 2% per month and 5% per quarter. In response, Blackstone's stock price fell 7% the first day and another 7% over the following week.
In this note, we explain how BREIT smoothed and inflated its reported returns for years, leading to extraordinary accolades, a prominent role in important regulatory...
First National Realty Partners Reg D Offerings: Muppets Do Commercial Real Estate
(Dec 2022)
By Craig McCann, Susan Song, Chuan Qin, and Mike Yan.
You can read our previous posts Reg D offerings:
1) "Reg D Offerings Summary Statistics" here,
2) "$8 Trillion of Broker-Sold Reg D Offerings" here,
3) "HJ Sims Reg D Offerings: Heads Sims Wins, Tails their Investors Lose" here, and
4) "Inactive and Delinquent Reg D Issuers" here.
You can download and print or email this post by clicking here.
Introduction
In a recent note, we explained how HJ Sims executives formed 91 separate...
Inactive and Delinquent Reg D Issuers
(Nov 2022)
By Craig McCann[1], Chuan Qin[2], and Mike Yan[3].
We have been researching Reg D offerings. You can read our previous posts "Reg D Offerings Summary Statistics" here, "$8 Trillion of Broker-Sold Reg D Offerings" here and "HJ Sims Reg D Offerings: Heads Sims Wins, Tails their Investors Lose" here. You can download and print or email this post by clicking here.
I. Introduction
Regulation D issuers are not required to provide disclosures that are mandatory in registered offerings. Not only...
$8 Trillion of Broker-Sold Reg D Offerings
(Nov 2022)
By Craig McCann[1], Mike Yan[2] and Chuan Qin[3].
We previously published Reg D Offerings Summary Statistics describing the aggregate issuance totaling over $20 trillion between 2009 and July 2022. You can read that post here.
In this post we provide summary statistics for Reg D offerings sold by broker dealers. You can get a pdf copy of this post to print or email by clicking here. Next week, we will be posting information on the extremely high failure rates for Reg D offerings.
I....
Regulation D Offerings Summary Statistics
(Aug 2022)
By Craig McCann, Chuan Qin and Mike Yan.
I. Introduction
Securities issuers can either register their securities with the Securities and Exchange Commission, making extensive information about their business and the offering publicly available, or they can sell unregistered securities making almost no information available to regulators. Issuers of unregistered securities file Form D reports with the SEC on which the issuers provide cursory information and claim an exemption from...
How Widespread and Predictable is Stock Broker Misconduct?
(Apr 2016)
In this paper we reconcile widely diverging recent estimates of broker misconduct. Qureshi and Sokobin report that 1.3% of current and past brokers are associated with awards or settlements in excess of a threshold amount. Egan, Matvos, and Seru find that 7.8% of current and former brokers have financial misconduct disclosures including customer complaints, awards, and settlements.
You can download our research paper, "How Widespread and Predictable is Stock Broker
Misconduct?".
We...
SLCG Research: Structured Product Indexes
(Nov 2013)
Most research on structured products focuses on what is known as initial date mispricing -- the difference between what a product costs and how much it is worth, as of the issue date. If you look at any of our structured product reports (let's take this reverse convertible, for example), you can see that the product was issued at a price of $1,000, but that the present value of its resulting cashflows only comes out to $960.40. The difference, $39.60 or 3.96%, represents an expected loss to...
SLCG Research: Priority Senior Secured Income Fund
(Oct 2013)
In our experience, retail investors are being sold increasingly obscure and non-conventional investments. An investment that raised our eyebrows recently is the Priority Senior Secured Income (PSSI) Fund. The PSSI Fund is the first regulated investment company that invests primarily in leveraged loans and collateralized loan obligation (CLO) tranches lower in their capital structures.
Unlike the mutual funds with which most retail investors are familiar, PSSI Fund investors are not able to...
