Distressed Debt Real Estate Private Financing Venture Capital
Debt markets are large and complex. Once issued, bonds are regularly traded in secondary markets and large discounts occur in distressed debt scenarios. High yields, significant price appreciation, and asset or equity ownership can occur depending on the situation. Real estate is a large sector of the economy and asymmetric opportunities are possible under the right circumstances. Property generates cash flow, may appreciate in value, and higher cash on cash returns on a tax adjusted basis can be achieved with the right approaches. With private financing, asymmetric risk/return profiles can be created for investors while providing borrowers favorable terms vs. commercial alternatives. Equity exposure/options can also be created through the use of fixed income investment vehicles like convertible notes. Venture capital is inherently risky yet returns can be substantial if a start-up succeeds. With the right structures and controls, risks can be better managed and returns improved through using tools like restricted capital, non-dilution clauses, debt instruments, and tax advantaged shares.
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