7. Alternative Investments Flashcards
Leasing Types
- Net Lease: Inquilino paga Operational Expenses
- Gross Lease: Proprietário paga Operational Expenses
- Tripple Net: Inquilino paga reparos, IPTU e seguros
Leasing Types (examples)
- Net Lease: Office and Industrial Warehouse
3. Tripple Net: Small shoppings
Appraisal Index (formula)
Return Appraisal = (NOI - Capex + Δ Mkt Value)/ MVo
Income Return = NOI / MVo
Capital = Resto / MVo
Cash Return = NOI - capex / MVo
Income Return (Formula)
Income Return = NOI /MVo
Capotal
Transactions Based Index
- Mais volátil
- Geometric Return
- Leads appraisal index
Valuation Types for AI (List)
- Income Approach: discount cashflow
- Cost Approach: Replicate how much the property would cost
- Sales Comparison Approach
Highest and Best Use (Concept)
Foco no uso que inputa o maior valor à terra, mesmo que já exista um edifício construído ali
Direct Capitalization Valuation (Formula)
Market Value = NOI / k - g
Going-in cap rate: NOI in 1st year of ownership
Terminal Cap Rate: NOI 1st year after sale
DCF Valuation (Formula)
V dcf = Explicit Forecast + Terminal Value (t)
Terminal Value (t): NOI t+1 / Terminal Value Cap Rate
LTV (Formula)
LTV = Loan Exposure / Valor do Ativo
Debt Service Coverage Ratio (Formula)
DSCR = NOI / Debt Service
Debt Service = (Juros + Principal)
Cash on Cash Return (Formula)
Cash / Eqt = (NOI - Serviço da Dívida)/Eqt
Levered IRR (Concept)
- Tomar dívida sempre aumenta a TIR desde que
[(1-t)*kd] < k equity
REIT (Concept)
- FIIs:
- May be tax free
- Dividend Yield is high
- 75% do Equity in Real Estate assets
- Low reinvestment
REOCs (Concept)
- Holding de família rica p/ gerenciar Real Estate
- Capital Appreciation focused
- Used if FII is not tax free
- Cashflow: sale of properties
Funds from Operations (FFO) x AFFO
FFO = (NI + Dep + Amort + Losses - Gains + Impairments - Writeoffs)
AFFO = FFO - capex - non-cash rent
Difference: FFO ignores capex. AFFO is better for REITs, but many REITs do not publish
Private Equity Valuation (List)
- Income Approach (Growing firm or already stable) ~ Nubank
- Relative Value ~ Late Expansion to Maturity
- Real Option: Call/Put mediante cumprimento de metas
- Replacement Cost: “Se eu construísse isso do zero, custaria quanto?”
Factors impacting valuation: control premium, lack of liquidity, country risk
VC stages (List)
- Seed (pre-sales)
- Startup (pre-sales?)
- Expansion
- Replacement
Exit Routs for PE/VC (List)
- IPO
- Secondary Sale
- Leveraged Buyout (Alavanca a Empresa p/ dar saída aos sócios)
- Liquidation
Private Equity Fee Structure (List)
- Management Fee (% Capital Committed or Paid In)
- Transaction Fees (to General Partners)
- Carried Interest (% of Profit = Performance Fee)
- Ratchet (Target Company Earn-out; Management da AmigoEdu ganha coisas se cumprir targets, permite + shares ao mgmt)
Vintage Year (Concept)
O ano de início do fundo impacta a medida de performance (ex: Abr/2020 as start date)
Term of PE funds
10 years
Governance PE clauses (List)
- Key Man Clause
- Disclosure / Confidentiality
- Clawback Provision
- Waterfall Structure
Other: tag along, drag along, no fault divorce GP removed if there is a supermajoriy vote
Paid In Capital (Formula)
PIC = Paid In / Committed Capital
TVPI (Formula)
TVPI = RVPI (Residual) + DPI (Distributed)
RVPI (Formula)
RVPI = Value Remaining Companies / Paid In Cumulative Capital
RVPI = Δ NAV before fees
Net of mgmt fees
Em relação aos Limited Partners (LPs)
DPI (Formula)
DPI = Cumulative Distr. to LP / Paid In Cumulative Capital
Net of mgmt fees
Em relação aos Limited Partners (LPs)
Post Money Valuation (Formula)
Post Money = Pre-Money + Investment
Return on Investment (Formula)
ROI = Value of Equity @ Exit / Post Money Valuation
Carried Interest (Details)
CI = “20% do que exceder profits after management fees”
- Pode ser deal by (i) deal basis ou (ii) after all
Contango
Futuro Subindo ↗
Expected Future Spot = Low
Roll Yield (Compare c/ Flat Spot) = NEGATIVO Calendar Spread (Futuro Hj - Futuro Amanhã) = NEGATIVO
Backwardation
Futuro Caindo ↘
Roll Yield (Compare c/ Flat Spot) = POSITIVO Calendar Spread (Futuro Hj - Futuro Amanhã) = POSITIVO
Roll Yield (Formula)
Roll Yield = (Future t0 - Future t1)/Future t1
Roll Yield = [F near - F farther / F near] - 1
Roll Yield = Actual - Future
Conceito: Futuro vai convergir pro Spot e gerar retornos positivos ou negativos?
Total Return Swap (Concept)
TRS = Pay Fixed x Receive Δ Index
Basis Swap (Concept)
Basis Swap = Δ Commodity 1 x Δ Commodity 2
Future Returns Theories (Keynes)
1) Keynes: Produtores querem hedgear (vender futuro) por medo de backwardation, logo
a. Preço Fwd CAI
b. ↑ Basis = (Spot - Fwd)
c. ↑ Basis = ↑ Spread. Logo, investidor precisa ser remunerado pelo risco adicional
Future Returns Theories (Hedging Pressure)
a. Produtores querem hedgear (vender futuro)
b. Usuário Final quer comprar futuro
Resultante determina estrutura de preços
Produtor vende (+) > Usuario Compra (-) = Backwardation pois Futuro vai cair
Usuário Compra (+) > Produtor Vende (-) = Contango pois Futuro vai subir
Total Commodity Return (Formula)
Total Return = Price Return + Roll Yield + Collateral Return
Theory of Storage (Concept)
Se storage costs are minimal, demand dominates supply.
Logo, Current Prices > Futures Prices + Minimal Costs
Basis Spread (Formula)
Basis Spread = (Spot Price - Near Term Future)
Check Status if Contango/Backwardation
- Compare Spot v. Near Term Future e veja se o Spot
Acima do Futuro: Contango (Futuro precisa SUBIR)
Abaixo do Futuro: Backwardation (Futuro precisa CAIR)
Calendar Spread (Formula)
Calendar Spread = (Future Near - Future far)
NOI (Formula)
Rental Income Full Occupied \+ Other Income = Potential Gross Income - Vacancy Loss - Operating Expenses = NOI
