At Crowd Street, our commitment to providing a quality investment experience extends beyond the initial transaction. Recognizing the evolving needs of our investors during the various cycles of the real estate market, we are introducing a new initiative to enhance portfolio monitoring and analysis capabilities through our Investment Products and Performance team.
The primary goal of this initiative is to anticipate and address challenges with active investments before they potentially escalate. By enhancing our portfolio monitoring, we aim to keep investors informed about their investments while working to help ensure a path forward when issues do arise.
While not all deals can be analyzed simultaneously, our team aims to work through our entire catalog of active investments over time.
In cases where challenges are identified, investors can expect proactive communication throughout the process. This new framework centers around the goal of providing investors with clear and concise updates, indicating the project's status and key metrics and outlining the path forward.
The introduction of the Investment Products and Performance team stems from our commitment to transparency, investor advocacy, and a dedication to driving possible solutions. By identifying potential issues early on, we can take action to help potentially protect our investors and their investments.
The foundation of our approach lies in a robust framework, designed to identify and categorize potential issues. The process involves a detailed analysis of active deals on the Crowd Street Marketplace, including those in funds and privately managed accounts, as well as individual offerings. This comprehensive evaluation encompasses debt information, enhanced portfolio analyses, and other financial health indicators.
Upon analysis, deals are categorized into five distinct groups based on the severity and nature of identified issues:
- Emerging Challenges: Includes, but is not limited to, non-reporting sponsors.
- Moderate Challenges: Includes, but is not limited to, moderate levels of negative investor sentiment.
- Significant Challenges: Includes, but is not limited to, capital calls projected by Crowd Street to require less than 10% and to occur more than six months away.
- Critical Challenges: Includes, but is not limited to, large capital calls, major negative investor sentiment, loan defaults, and stalled projects.
- Legal Challenges: Potential lawsuits from stakeholders in the project.
Each category has a defined action plan to address challenges that is customized for the specifics of each individual project. While the action plans do vary, they typically include a thorough analysis of the deal, proactive communication with the sponsor about the identified issues, and memos informing the investors of the status, action plan, and all other relevant information.
Through this initiative, our goal is to be a partner throughout your investment's lifecycle by keeping you informed and confident in your investment journey with Crowd Street. We look forward to enhancing the investment experience for our investors.
This article was written by an employee(s) of Crowd Street and the contents of this publication are for informational purposes only. Neither this publication nor the financial professionals who authored it are rendering financial, legal, tax or other professional advice or opinions on specific facts or matters, nor does the distribution of this publication to any person constitute an offer, recommendation, or solicitation to buy or sell any security or investment product issued by Crowd Street or otherwise. The views and statements expressed are based upon the opinions of Crowd Street. All information is from sources believed to be reliable. This article is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any investor. All investing involves risk, including the possible loss of money you invest, and past performance does not guarantee future performance or success. All investors should consider such factors in consultation with a professional advisor of their choosing when deciding if an investment is appropriate. Crowd Street assumes no liability in connection with the use of this publication. An investment in a private placement is highly speculative and involves a high degree of risk, including the risk of loss of the entire investment. Private placements are illiquid investments and are intended for investors who do not need a liquid investment. No guarantee or representation is made that a project will achieve its investment objectives or that investors will receive any return on their investment. Investors should consult with a financial advisor, attorney, accountant, and any other professional that can help you to understand and assess the risks associated with any investment opportunity. All investors should review the offering's documents carefully before investing.
