Alternative Investiments

Question 1

♦ALT INV♦

REIT vs REOC

Answer 1

REIT: Real Estate Investment Trust - tax-advantage, obligated to payout as dividend, more liquid REOC: Real Estate Operating Company - able to reinvest, more flexible

Question 2

♦ALT INV♦

NOI and cap rate

Answer 2

+ Rental income (fully occupied)

+ other income

(=) Potential gross income

• vancacy

(=) effective gross income

• operating expense

= NOI (net operating income)

• SG&A

= EBITDA

Value = NOI / cap rate

Para NAV, somar caixa e tirar dívida

Question 3

♦ALT INV♦

FFO

Answer 3

+ NI

+ NCC

+ Deffered tax

• Gains w/ property sale and debt restr

+ Losses w/ property sale and debt restr

= FFO

NOI - G&A = EBITDA - interest = FFO

Question 4

♦ALT INV♦

AFFO

Answer 4

+ FFO - non-cash rend adjust - recurring capex = AFFO

Question 5

♦ALT INV♦

Post-money valuation (POST)

Answer 5

POST = PRE + INV PRE = how much a company was valued INV = Investment of VC fund in the company VC / POST = VC %

“Se o empreendedor hoje tem 100 ações e você detem 40% da empresa, precisa emitir 100 / (1 - 40%) * 40% para você”

Question 6

♦ALT INV♦

Multiples (PIC, DPI, RVPI, TVPI)

Answer 6

PIC = Paid in K / Commited K DPI = Accum. dist K / Invested K RVPI = Value of remaining postion / Invested K TVPI = DPI + RVPI (MOIC)

Question 7

♦ALT INV♦

Performance Measures

Answer 7

. Year - 1 , 2 , 3

. Called Down - x , y , z

1. Paid in - x, x + y, x + y + z
2. Mgmt Fees (2%) - x*2%, x+y…
3. Operating Result - Real and Unreali
   a. NAV - (1) + (2) + (3) *** tomar cuidado que aqui precisa sempre considerar o NAV after dist como starting point ***
   b. Perf Fee (20%) - if total return, must exceed the commited capital, otherwise, 20% of NAV - Accum Paid in K
   c. Distribution

. NAV After dist = (a) - (b) - (c)

Question 8

♦ALT INV♦

Theories of commodity future return

Answer 8

Insurance Theory: Keynes - Seguro para o vendedor, que ao vender no mercado futuro faz com que backwardation seja o natural

Hedging Pressure Hypothesis: Quando a necessidade de hedge é maior no comprador a curva fica em contango, se for no produtor ficam e backwardation

Theory of Storage: Formato da curva é definido pela relação entre storage cost e benefit of holding the commodity. Quando custo é maior, backwardation.

Question 9

♦ALT INV♦

Roll return

Answer 9

Melhor no backwardation por que você vai rolando mais e mais barato