Alternative Investments Flashcards
What are the basic RE forms and within them?
What are core property RE types?
What are non-core property types?
How can RE be invested in (four types)?
What are the characteristics of RE?
What are the valuation risk factors for RE?
What are the property operation risk factors?
RE cashflow is a function of what?
How do economic factors affect retail, office, industrial, multi-family and Hotel?
What role does RE have in an investment portfolio (what does it offer)?
5/ Tax Benefits - depreciation tax shield for direct
investments, elimination of corporate tax for REITs as long as a min. amount of taxable income is paid as a div.
What is the risk/return profile of RE relative to other investment types?
What comes under the classifications of Office, Industrial and Retail?
What comes under classifications of Hospitality and other speciality ?
What are the different lease types?
Investment characteristics of Office and industrial RE?
Investment characteristics of Retail and multi-family?
What are the considerations in DD for private investment?
DD considerations for investing in REIT (public)?
How do appraisal based indexes calculate returns?
What are the two transactions indexes?
Pros and cons of appraisal and transaction indexes?
What are the three valuation approaches for RE investments
Explain what is meant by “highest and best use”?
What is the direct capitalization method and how to interpret what a higher and lower cap rate means? Difference between going-in and terminal cap rate?
Can NOI growth rate not equal the implicit g in the cap rate? What would stabilized NOI include?
Explain the DCF method of RE valuation?
Describe equity and mortgage REITS? Describe REOCs?
What are main CFs fo REOC’s and what do they usually do with CFs? Describe the usual structures of REITS?
What are the pros and cons of REITS?
Describe NAVPS premium and discount and what are the different measurements for RE under IFRS vs GAAP?
How is NAVPS calculated?
NAV reflects value to which type of buyer? What are the issues with NAV
How is FFO and AFFO calculated?
Compare AFFO vs FFO and what are the relative valuation measures?
What are the main drivers of multiples?
Which is the most widely accepted multiple and what are the disadvantages of it?
Summary of pros and cons of private vs public RE investments
What are the different stages in VC and what are the types of buyouts? Who are the investors in PE firms?
What are the valuation techniques used and what are the other considerations?
How can value be created by re-engineering private firms and from greater access to credit markets?
How can value be created from alignment of interests ?
What other methods can be used to align interests?
What is the difference between BO vs VC in terms CF volatility, market position, asset base, management and leverage?
Difference between buyout vs VC in terms of risk measurement, exit, previous trading history , WC needs, due diligence, monitoring by PE firm and variability in returns?
Buyout firms vs VC firms, what type of transactions are BO vs VC and what do each derive most of their revenue from?
What are the 6 characteristics that BO targets usually possess?
What are the three types of buyouts and what is needed in an LBO model/ what inputs go into the PV(Max price)?
What are the potential additional sources of value in a buyout?
Explain the VC method and post and pre money valuation formula ?
Example vc method calc?
Explain VC method when there is existing stock options?
What is stage financing used for and example of calc?
What are the four exit routes for VC?
What are the general PE risk factors?
What are the general PE costs?
What are two main differentiating factors of public vs private equity? What do PE funds need expertise?
Explain the usual timeline of a PE fund?
What are the economic terms
What are the key governance terms?
a) key man clause
What is the main focus of due diligence?
What are the 6 methods of PE fund valuation?
Explain IRR and the PIC, DPI, RVPI, TVPI multiples and how are they presented?
What is a commodity and which are soft and hard?
How do commodities offer diversification, how to they derive their value and what are the 6 sectors?
Properties of crude oil?
Properties of natural gas?
Properties of refined products?
Properties of the grains and industrial sector
Properties of live stock and precious metals sector
Properties of cash crops
Explain the production cycle for energy
Explain how refineries, pipelines and exploration affect crude S&D? What are the standard contracts for gas, gasoline and natural gas
Explain the production process for industrial/precious metals
Industrial/precious metals production process continued
Explain the production processes for livestock?
Explain the production process for grains
Explain the production process for softs
What are the differences in valuation between commodities and stocks & bonds?
Who are the main participants in commodity markets
What is the difference between spot an futures price, what is the calendar spread, what does backwardation and contango mean
What are the trading strategies under backwardation and contango
What is the insurance (keynes) theory on futures curve shape?
What is the hedging pressure hypothesis
What is the theory of storage?
What are the main components of futures returns
how is roll return calculated?
What is collateral return
How does roll return differ by sector
What is a commodity swap and why may an investor want one
Example of how commodity swap works
What is a total return swap, basis swap, variance swap and volatility swap
What is a commodity index and how do they differ based on breadth of coverage, relative weighting, rolling methodology, rebalancing of weights
How do index differ on governance, what two things should the index be,
Describe the S&P GSCI and BCOM indexes?
Describe the Deutsche Bank Liquid, TR/CC CRB and RICI indexes and what are their rebalancing frequencies
