Chapter 13 CAIA Flashcards
Master Limited Partnerships
MLPs receive tax treatment predicated on adhering to regulations, including that at least 90% of the entities’ revenues come from specified businesses, such as energy.
Chambers, Donald R.; Anson, Mark J. P.; Black, Keith H.; Kazemi, Hossein. Alternative Investments: CAIA Level I (Wiley Finance) (p. 306). Wiley. Edición de Kindle.
Upstream Operations
Upstream operations focus on exploration and production;
Chambers, Donald R.; Anson, Mark J. P.; Black, Keith H.; Kazemi, Hossein. Alternative Investments: CAIA Level I (Wiley Finance) (p. 306). Wiley. Edición de Kindle.
Midstream Operations
midstream operations focus on storing and transporting the oil and gas;
Chambers, Donald R.; Anson, Mark J. P.; Black, Keith H.; Kazemi, Hossein. Alternative Investments: CAIA Level I (Wiley Finance) (p. 306). Wiley. Edición de Kindle.
Downstream Operations
and downstream operations focus on refining, distributing, and marketing the oil and gas.
Chambers, Donald R.; Anson, Mark J. P.; Black, Keith H.; Kazemi, Hossein. Alternative Investments: CAIA Level I (Wiley Finance) (pp. 306-307). Wiley. Edición de Kindle.
MLP Ownership Structure
Three major types of entities:
Taxable Corporations (C corporations),
Untaxed Corporations (investment companies),
Limited Partnerships.
Chambers, Donald R.; Anson, Mark J. P.; Black, Keith H.; Kazemi, Hossein. Alternative Investments: CAIA Level I (Wiley Finance) (p. 307). Wiley. Edición de Kindle.
PVGO VALUATION THEORY: I
PVGO VALUATION THEORY: In corporate finance, present value of growth opportunities (PVGO) describes a high value assigned to an investment based on the idea that the underlying assets offer exceptional future income. Thus, a growth stock might sell for a much higher value than is justified by its past and current income based on its PVGO.
Chambers, Donald R.; Anson, Mark J. P.; Black, Keith H.; Kazemi, Hossein. Alternative Investments: CAIA Level I (Wiley Finance) (p. 308). Wiley. Edición de Kindle.
PONZI-LIKE VALUATION THEORY
PONZI-LIKE VALUATION THEORY: A Ponzi scheme is an overpriced and fraudulent operation in which cash inflows from new investors are distributed to old investors with the false description that they emanate from the current and past success of the underlying investments. The fraud can be perpetuated as long as investors can be deceived into believing that the distributions are emanating from true profits.
Chambers, Donald R.; Anson, Mark J. P.; Black, Keith H.; Kazemi, Hossein. Alternative Investments: CAIA Level I (Wiley Finance) (p. 308). Wiley. Edición de Kindle.
Investable Infrastructure
Investable Infrastructure is typically differentiated from other assets with seven primary characteristics:
(1) public use,
(2) monopolistic power,
(3) government related,
(4) essential,
(5) cash generating,
(6) conducive to privatization of control, and
(7) capital intensive with long-term horizons.
Chambers, Donald R.; Anson, Mark J. P.; Black, Keith H.; Kazemi, Hossein. Alternative Investments: CAIA Level I (Wiley Finance) (p. 309). Wiley. Edición de Kindle.
Public use
Public use refers to the idea that the associated economic activity is accessed by a large segment of the population or is viewed as serving the general welfare of a society.
Chambers, Donald R.; Anson, Mark J. P.; Black, Keith H.; Kazemi, Hossein. Alternative Investments: CAIA Level I (Wiley Finance) (p. 309). Wiley. Edición de Kindle.
Monopolistic power
Monopolistic power refers to the extent to which services are offered by a single provider or are offered such that the provider can set prices relatively free from competition.
Chambers, Donald R.; Anson, Mark J. P.; Black, Keith H.; Kazemi, Hossein. Alternative Investments: CAIA Level I (Wiley Finance) (p. 310). Wiley. Edición de Kindle.
Government related
Government related refers to the extent to which the underlying assets are typically created by, owned by, managed by, or heavily regulated by government.
Chambers, Donald R.; Anson, Mark J. P.; Black, Keith H.; Kazemi, Hossein. Alternative Investments: CAIA Level I (Wiley Finance) (p. 310). Wiley. Edición de Kindle.
Infrastructure assets
Infrastructure assets tend to provide essential goods or services, such as electricity distribution. Hence, the demand for the goods or services is usually price inelastic, and cash inflows tend to be stable and inflation-protected.
Chambers, Donald R.; Anson, Mark J. P.; Black, Keith H.; Kazemi, Hossein. Alternative Investments: CAIA Level I (Wiley Finance) (p. 310). Wiley. Edición de Kindle.
Investable infrastructure
Investable infrastructure tends to be focused on assets that directly generate cash, such as toll roads, rather than similar assets that are supported by general tax revenues, such as highways other than toll roads.
Chambers, Donald R.; Anson, Mark J. P.; Black, Keith H.; Kazemi, Hossein. Alternative Investments: CAIA Level I (Wiley Finance) (p. 310). Wiley. Edición de Kindle.
Investable infrastructure
Investable infrastructure may possess attributes that make the underlying assets and systems relatively conducive to privatization of managerial control.
Chambers, Donald R.; Anson, Mark J. P.; Black, Keith H.; Kazemi, Hossein. Alternative Investments: CAIA Level I (Wiley Finance) (p. 310). Wiley. Edición de Kindle.
Investable infrastructure
Investable infrastructure may possess attributes that make the underlying assets and systems relatively conducive to privatization of managerial control.
Chambers, Donald R.; Anson, Mark J. P.; Black, Keith H.; Kazemi, Hossein. Alternative Investments: CAIA Level I (Wiley Finance) (p. 310). Wiley. Edición de Kindle.
Investable infrastructure is usually capital intensive, with underlying assets that are long-term in nature.
Chambers, Donald R.; Anson, Mark J. P.; Black, Keith H.; Kazemi, Hossein. Alternative Investments: CAIA Level I (Wiley Finance) (p. 310). Wiley. Edición de Kindle.
Investable infrastructure is usually capital intensive, with underlying assets that are long-term in nature.
Chambers, Donald R.; Anson, Mark J. P.; Black, Keith H.; Kazemi, Hossein. Alternative Investments: CAIA Level I (Wiley Finance) (p. 310). Wiley. Edición de Kindle.
Greenfield Project
Investable infrastructure can originate as a new, yet-to-be-constructed project, referred to as a greenfield project, that was designed to be investable.
Chambers, Donald R.; Anson, Mark J. P.; Black, Keith H.; Kazemi, Hossein. Alternative Investments: CAIA Level I (Wiley Finance) (p. 310). Wiley. Edición de Kindle.
Brownfield Project
Investable infrastructure can also be an existing project, or brownfield project, that has a history of operations and may have converted from a government asset into something privately investable.
Chambers, Donald R.; Anson, Mark J. P.; Black, Keith H.; Kazemi, Hossein. Alternative Investments: CAIA Level I (Wiley Finance) (p. 310). Wiley. Edición de Kindle.
Public Private Partnership
A public-private partnership (PPP) occurs when a private-sector party is retained to design, build, operate, or maintain a public building (e.g., a hospital), often for a lease payment for a prespecified period of time.
Chambers, Donald R.; Anson, Mark J. P.; Black, Keith H.; Kazemi, Hossein. Alternative Investments: CAIA Level I (Wiley Finance) (p. 312). Wiley. Edición de Kindle.
Regulatory Risk
Regulatory risk is the economic dispersion to an investor from uncertainty regarding governmental regulatory actions.
Chambers, Donald R.; Anson, Mark J. P.; Black, Keith H.; Kazemi, Hossein. Alternative Investments: CAIA Level I (Wiley Finance) (p. 312). Wiley. Edición de Kindle.
Intangible Assets
Intangible assets are economic resources that do not have a physical form. Intangible assets are real assets and can include ideas, technologies, reputations, artistic creations, and so forth.
Chambers, Donald R.; Anson, Mark J. P.; Black, Keith H.; Kazemi, Hossein. Alternative Investments: CAIA Level I (Wiley Finance) (p. 315). Wiley. Edición de Kindle.
Intellectual Property
forth. Intellectual property (IP) is an intangible asset that can be owned, such as copyrighted artwork.
Chambers, Donald R.; Anson, Mark J. P.; Black, Keith H.; Kazemi, Hossein. Alternative Investments: CAIA Level I (Wiley Finance) (p. 315). Wiley. Edición de Kindle.
