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Conference

Real Estate, Direct Lending & Private Debt Forum - Part III

May 19, 2020
14:00 PM - 20:00 PM
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Thank you to our Sponsors, Preqin, Millennium Trust, ApexOne Investment Partners, EnTrust Global for helping us make this event possible. Without your support and guidance, we would not have been able to produce such a high quality and great event again. Thank you to all of our FLAIA Members and the FLAIA Board for their support during these challenging times. It is amazing how our community has come together to provide Leadership during great uncertainty. I am proud to be a part of this great group!

Real Estate, Direct Lending and Private Debt are 3 legs of the alternative investment industry and over the past 10 years each of these legs have grown to have a much more profound impact on Main Street. Perhaps these 3 legs have been the hardest hit part of the overall alternative investment industry. Because of the lack of real time liquidity and real time price discovery this Forum is the most important conversation for global investors to join. Most investors have exposure to real estate through equity / credit and amid a crisis, no one has all the answers today. We are determined to bring clarity, truth, facts and experience from the front line by the most talented investment managers.

The content that you helped to shape by answering the survey questions are being used to designed to help shape and generate answer to the questions that are causing lots of sleepless nights. Part III of the Real Estate, Direct Lending and Private Debt Forum will look at the short and long term impact of COVID-19 as well as a look at future opportunities coming out of the global pandemic. The coronavirus crisis has rapidly become a major part of Americans’ everyday lives and many of us are thinking about how the virus has and will continue to impact all sectors of the commercial real estate industry, direct lenders and private debt holders. Coronavirus is creating extreme uncertainty in the short-term with regards to cashflows. There will be a new normal defined by how people shop, work and play in the future. The question is, how will the new norm impact these 3 main pillars of our financial economy?

In our last survey, you responded contrary to popular thought because most did not think it was appropriate to discuss investment opportunities right now in the middle of this crisis. Part I of this conversation stayed away from investment opportunities as we collectively decided to focus more on the right here and right now. Due to overwhelming demand, the conversation will start to look at opportunities available today and in the medium term. We will include a look forward at conditions and opportunities in distressed investments and structuring issues involved in coinvestments vs. direct investments.

Investment opportunities that help businesses that need working capital solutions to turn around the economy in time of Covid-19 will be a key theme of this event. The pandemic is a crisis like no other affecting two fronts: the medical and the economic. The importance to keep the economy running during the crisis is critical for those essential services, food distribution, delivery, and public utilities. Then will come the recovery. Liquidity is the key of to the game and where the alternative investment sector should focus on. The success of the pace of recovery will depend crucially on policies undertaken during the crisis. If policies ensure that workers do not lose their jobs, renters and homeowners are not evicted, companies avoid bankruptcy, and business and trade networks are preserved, the recovery will occur sooner and more smoothly. All working capital solutions that free liquidity into the market will be part of a quick recovery.

While the results from the survey produce sort of a photo finish, the winner of the most interest goes to Private Debt. The discussion will cover opportunities as our managers identify and discuss today’s pressure points in private debt and credit due to the Covid-19 pandemic that will lead to the opportunities of 2020 and beyond. Our expert panel will reflect on past crises and discuss how they are adjusting to today’s new realities and preparing for tomorrow’s opportunities. How are managers handling the increased uncertainty and risk? And where are the related opportunities?

Last month I listened to Jaime Dimon, CEO of JP Morgan discuss how banks are the lenders of last resort and I could not help but think about how businesses are constantly looking for access to capital that traditional banks have not been able to provide since the Great Recession. I thought about the role that banks have been playing since the by lending to direct lenders rather than directly to businesses. This does not align with Jamie Dimon’s internal dialogue and I have witnessed the growth of many platforms as they have stepped in to fulfill the demand. One of the main reasons that businesses and real estate investors have chosen direct lenders over banks is their ability to respond quickly, underwrite deals and get loans funded.

We will learn more from market participants as they shed light on the current conditions!

  • Opportunities in Distressed Debt During the Pandemic
    15:00 PM - 16:00 PM
    Panel
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    We are all aware of the profound disruption that this pandemic is causing to our lives and our economy. It is the first pandemic we are facing in modern times and the level of uncertainty about how the situation will unfold is just unbearable. There are too many variables, and we really don't know how bad the economy will be impacted, and how long it will take for it to recover; we don't even know if and when this virus will leave our lives. What we do know for sure, though, is that, no matter what the central banks and governments do—no matter how much money they print and how they distribute it—an increasing number of people will delay and default on their loans, and more companies will declare bankruptcy, as it's already happening. There is no doubt that this is a grim environment for investors, especially for those who have exposure to the most affected sectors. However, the good news is that this disruption is also generating unprecedented opportunities that we are going to discuss with our guest panelists.

    2 Interesting Data Points

    PNC Financial Services Group said, it completed the sale of its stake in money manager Blackrock Inc. for some $14.4 billion. The Pittsburgh-based bank sold 31.6 million shares of common and preferred stock through a registered offering at $420 per share.

    Blackstone COO, John Gray says distressed buying opportunities are still about a year away from full scale deployment of 44 billion dollars of dry powder while posting a 1st quarter write down of 30.3% on their distressed debt opportunities fund.

    • What are the opportunities today in distressed debt?
    • Is this an opportunity or a falling knife? What should investors think about when considering making an allocation in the distressed space?
    • Are lenders lending and if not when will this change?
    • What are the sources of deal flow and who gets the first look at the best opportunities? Why?
    • Is this the end of the era for convenient lite notes?

    Speakers: Christian Sarcuni, Brian M. Prenoveau, CFA, Luiz Pacheco, Bill Bymel, and Aradhna Dayal

  • Where Are We Heading? The Recovery After Pandemic. Timing Is Everything.
    14:30 PM - 15:00 PM
    Panel
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    To discuss achieving investment returns in a turbulent, low interest rate environment, Nick Eskandari, President/CEO of Key Bridge Fund, and Brian Heller, Managing Director, will examine topics including commercial real estate perspectives in today’s market, positioning for resilience, and capitalizing on the opportunities in the capital market.

    • A perspective of recovery
    • Is fixed income a viable investment strategy?
    • Why are private mortgage REITs a safer and more stable alternative investment with attractive returns to investors in these uncertain times?

    Speakers: Nick Eskandari and Brian Heller

  • Multiply Your Returns with Opportunity Zone Funds
    13:30 PM - 14:30 PM
    Panel
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    Tax efficient investing via Opportunity Zones has never been as attractive as today. The panel will look at how Opportunity Zones have matured and what investors should consider given the recent guidance and final regulations from the IRS. Our experts in tax efficient investing, accounting and fund management will also discuss what Family Offices need to consider when allocating capital to the various Opportunity Zone Funds.

    Having a big idea in today's exceptional times, needs to be coupled with exceptional operating partners. Tax efficient investing needs to be aligned with proper planning, so join us to listen to our experts speak about different real estate investment opportunities to supplement this tax efficient structure.

    • How has the Opportunity Zone marketplace matured over the last year as the IRS has issued additional guidance and final regulations?
    • Investor considerations — in particular family offices and high-net worth individuals
    • What are the most important changes in Opportunity Zones for investors to consider?
    • How much capital is there on the sidelines?
    • What should investors consider when thinking about which long-term capital gains to consider harvesting via Opportunity Zone Funds?
    • What are intended and unintended consequences of Opportunity Zones? Give some real world examples of success & failure.

    Speakers: Michael D’Onofrio, Lane Lowry, Eric Berman, Jason Cross, and Russ Ginise

  • Lessons from 40 years in the Private Lending Industry
    13:00 PM - 13:30 PM
    Keynote
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    Elizabeth is the Chief Marketing Officer for Applied Business Software. She has a proven record in senior operational roles and is known as an inspirational leader and a data-driven marketer. She has created full scale marketing platforms, handles media, public relations and brand management for ABS; a strategic planner and forward thinker. Elizabeth has a Bachelor of Arts in Spanish Literature and a Masters in Business Administration.

    • What is the secret to being around and relevant for 40 plus years?
    • How do people use your software and how does it move their business forward?
    • How up to date is your software in compliance?

    Speakers: Elizabeth Morales

  • Banks vs Direct Lenders: Capital Solutions During Time of Crisis
    12:00 PM - 13:00 PM
    Panel
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    In an environment of uncertainty where cash is KING, what are Banks and Direct Lenders thinking about post-pandemic? But before I go there, where were we?

    Pre-pandemic, the global economy was buzzing along on two and half or three cylinders and I say this because even though the US was steaming along on 4 cylinders, China, Germany and many countries in Europe and the rest of the world were showing signs of financial fatigue with slowing economic output as measured by GDP growth. 

    • If we could go back to Oct. 2019, what did your business and growth goals look like for 2020?
    • How about now as we work through the end of the year with Wave 1 of the pandemic in progress and in some countries with Wave 2 in progress?
    • How has supply chain and related financing activity changed? (Advance percentages, rates, type of businesses or assets you are willing to finance etc.?)

    Speakers: Roberto Munoz, Shalako Wiener, Dipak Jogia, Willy Gomez, and Nic Perkin

  • How Are Private Lenders Benefitting From Challenging Times And Other Dislocated Private Market Opportunities
    10:30 AM - 11:30 AM
    Panel
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    Join us for a panel as we discuss how private lenders are benefitting from these current challenging economic times and explore other dislocated private market opportunities that will lead to the opportunities of 2020 and beyond. Our expert panel will reflect on past crises and discuss how they are adjusting to today's new realities and preparing for tomorrow's opportunities.

    • How has debt capital available to private businesses been impacted by the current economic environment? Is this different based on size of market the company is in?
    • What types of loans are banks most easily able to make in the current environment?
    • What kind of niche opportunities represent the most attractive opportunities for non-bank lenders?
    • How are debt terms changing to reflect the current economic environment?
    • Will this time be different for private debt lenders than the success they enjoyed investing during prior recessions?

    Speakers: Brett Hickey, Matt Gilbert, Tod Trabocco, Ashley Knight, and Jeffrey Marron

  • Digital Solutions Amid a Physical Storm to Accelerate & Enhance Buy Side Due Diligence
    10:00 AM - 10:30 AM
    Keynote
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    FLAIA launched an online digital platform in 2019 and has made great strides in rolling it out to supplement the Buy-Side Discovery and Due Diligence process. FLAIA designed the platform to conform to the rigors of a busy life not knowing that people would be further hindered by COVID -19. The platform uses investor preferences and deal highlights to make a market in alternative investments with the mission and vision of being the world's leading marketplace for alternative investments and alternative investment education. Michael Corcelli, the Founder & Chairman of FLAIA will demonstrate the platform in real time showing how the deal marketing, due diligence and fund raising process is fully digital and compliant with securities rules, regulations and compliance.

    • Creating a process to look at investment opportunities in 2021
    • How to use the digital environment to uncover exceptional investment opportunities and express your macroeconomic view
    • Staying on top of your current investments by looking at similar investments online
    • Using the current environment to shape your relationships with your asset managers
    • How to supercharge the due diligence process from the comfort and safety of your home or office

    Speakers: Michael Corcelli

  • Introduction to the Special Situations Section of FLAIA Marketplace
    11:30 AM - 12:00 PM
    Panel
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    FLAIA launched an online digital platform in 2019 and has made great strides in rolling it out to supplement the Buy-Side Discovery and Due Diligence process. FLAIA designed the platform to conform to the rigors of a busy life not knowing that people would be further hindered by COVID -19. The platform uses investor preferences and deal highlights to make a market in alternative investments with the mission and vision of being the world's leading marketplace for alternative investments and alternative investment education. Michael Corcelli, the Founder & Chairman of FLAIA will demonstrate the platform in real time showing how the deal marketing, due diligence and fund raising process is fully digital and compliant with securities rules, regulations and compliance.

    • Creating a process to look at investment opportunities in 2021
    • How to use the digital environment to uncover exceptional investment opportunities and express your macroeconomic view
    • Staying on top of your current investments by looking at similar investments online
    • Using the current environment to shape your relationships with your asset managers
    • How to supercharge the due diligence process from the comfort and safety of your home or office

    Speakers: Michael Corcelli and Rainford Knight

  • Outlook for Multi-Family Sector Over the Next 12-18 Months Against the Backdrop of COVID-19
    15:00 PM - 16:00 PM
    Panel
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    We will review the impact of COVID - 19 on Workforce Housing, Multi Family, Senior Living throughout the US. The panelists will also talk about the impact of lower interest expense while providing insight into their relationship with their lenders. We welcome audience participation and look forward to an interactive session.

    • April & May rental payment tracking. What have we learned?
    • Near-term change in apartment fundamentals & underwriting.
    • Investors, buyers and sellers strategies for multifamily investing?
    • How transactions are getting done and impact on pricing.
    • What changes are we seeing in the debt market?

    Speakers: Nick Neri, Grant Cardone, Ernest Johnson, Nate Kline, and Chris Finlay

  • Hard Money Lending
    14:30 PM - 15:00 PM
    Panel
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    Asset based loans, also called hard money loans, are widely used by real estate investors who appreciate fast approval with more flexibility and less invasive documentation. Hard money loans look first to collateral whereas traditional bank loans are based on cash flow. 

    Join us to explore this fascinating niche in the lending market. 

    • What is Hard Money Lending and why does it exist?
    • What are the advantages of a Fund structure?
    • What is the current outlook?

    Speakers: Rob Jafek and David Nielsen

  • Co-Investment vs Direct Investment: Raising Money through Successful Structuring, Custody & Compliance
    13:30 PM - 14:30 PM
    Panel
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    Co-Investing vs Direct Investing is possibly the hottest topic today for both Investors and General Partners to consider. The panel will discuss strategies Investors and General partners should consider while considering a Co-Investment or DIrect investment opportunity. This diverse panel of experts will provide different points of view to consider while arranging an alternative investment offering. If you are an investor being approached by an operating business to be a lead investor or you are an investor tagging along a lead investor, what issues should you consider? Points of view vary depending on the role that you are playing in either transaction. No matter if you are an operating partner or a financial sponsor, this panel will look at everything from costs, legal and business considerations that are being proposed to you. Our experts will discuss and answer Q&A, and share their expert insights into structuring, legal issues, compliance and custody rules while contemplating a Co-Investment vs. Direct Investment opportunity. 

    • The role credit plays in making the rights decisions when considering a Co-Investment vs Direct Investment opportunities.
    • What role do relationships and sourcing play in selecting an investment banker to help you consider and structure Co-Investment vs Direct Investment opportunities?
    • How do Co-Investments help General Partners get a Direct Investment accomplished?
    • What are the various structures that Investors and General Partners should consider when contemplating a Co-Investment vs DIrect Investment?
    • Guidance on selecting which offering exemption (Reg D 506(c), Reg D 506(b), Reg A+) for General Partners to use?
    • Which investors prefer Direct Investing and which prefer Co-Investing investing?
    • Given this new market environment, which vehicle is best for capital raising and which vehicle is the best for the investor? & Why?
    • How much time will it take and what are the various costs of creating the right structure from the point of view of the investor vs operating partner? Who should expect to pay which costs?
    • What is the role of a custodian for an alternative asset fund?

    Speakers: Tom Kurinsky, Evan Wein, Sara Borazan, and Yuting Ren

  • Opportunities in Private Credit Funds & Performance During a Recession
    12:00 PM - 13:00 PM
    Panel
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    As the US and the global economies continue to simultaneously address both health and financial risks stemming from the COVID-19 pandemic, it is a natural time for investors to reassess their own portfolio and investment allocations. Join us as we see what lenders and credit providers are doing across the marketplace.

    • Update on how the ongoing pandemic is impacting the lending environment
    • What have lenders learned so far in 2020?
    • How have existing investments held up with the financial pressure due to the pandemic?
    • Are the ongoing financial challenges creating new opportunities for lenders?

    Speakers: Antonio Zuniga, Brad Lyons, Mark Fitzpatrick, Chris Innes, and Richard Beleutz

  • What Drives Online Traffic and Leads in Direct Lending
    11:30 AM - 12:00 PM
    Keynote
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    We're going to walk through an informal case study of a Direct Lender to reveal the truths around what drives traffic to their website. At DiamondLinks, we commonly find that providers aren't fully aware of why potential clients are finding them online, or more commonly, why they are not. This case study will serve as a representative sample of the opportunity that lies in influencing how potential clients can be funneled to your site and converted into leads. 

    • Organic Search equates to 94% of web traffic
    • Direct Lending search terms need to be understood to drive traffic
    • How do you better understand what potential clients are searching for online

    Speakers: Brandon Hopkins

  • Hospitality-Recovery and Resilience
    10:30 AM - 11:30 AM
    Panel
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    There are going to be opportunities in the development, redevelopment, and repurposing of hospitality projects, where our industry is going to develop into a “new norm” in “Demands” for design and functionality. Newer needs, newer concepts of comfort and a new definition for Hoteliers of how to be bigger within smaller experiences. Professional hospitality will be in higher demand. How are Hoteliers navigating the disruption now and how are they preparing for the uncertainty of the future?

    • What are the make and break factors?
    • Challenges to re-opening?
    • Timeline to recover, concerns on that pathway?
    • Develop, redevelop, or acquire in today’s world?
    • Defining a good partner / investor!

    Speakers: Amanda Jogia, Bharat Sangani, MD, Joseph W. DeMatteo Sr., and Dharmin Patel

  • Navigating Real Estate and Private Debt through a Pandemic
    10:00 AM - 10:30 AM
    Keynote
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    Using Preqin data, Jesse will examine the impact that COVID-19 has had thus far on the private equity real estate and private debt industry. We will delve into fundraising trends across those two industries, the effect the virus has had on deal making, and lessons we can take away from the last recession for managers today. We will also look at how institutional investors have been reacting to the downturn and how they might allocate towards private capital over the longer term.

    • Examining the immediate impact COVID - 19 has had on fundraising across real estate and private debt
    • How have deals been effected by the current landscape
    • Are LPs sticking with the asset classes in the near and longer term
    • What effect might this have on fund performance
    • Where are managers and investors feeling the biggest change in business

    Speakers: Jesse Fahy