Private Equity: The best kept yield secret
On behalf of all us at TriView Capital Ltd., we hope that you had a great holiday and look forward to a prosperous 2017!
2016 was a great year for TriView as we surpassed over $200 million deployed into private and alternative investments. We believe 2017 will continue to be a volatile year in the public markets and private equity can offset that volatility and act as a good long-term investment strategy in people’s portfolios. We actually spoke last quarter with Michael Campbell on his MoneyTalks program about two specific opportunities that target 8% – 10% annual yield and those interviews are on this page just to the right or below.
I always feel that January is a good time to provide advice for the new year especially when we’ll be discussing private equity at the upcoming World Outlook Conference on February 3rd. At the upcoming World Outlook Conference, we will be discussing the difference between public and private companies when it comes to capitalizing their business. I don’t want to steal the thunder for attendees but what I will tell you now is that the main difference is control, business valuations and what both markets offer investors. This is the main reason for private equity being the best-kept yield secret for 2017.
With our crystal ball, we see the following opportunities in our space for 2017:
Yield based returns
Private equity will continue to take more capital from the public markets and one of the main reasons is yield producing returns. It will be very difficult for the public markets to provide a yield of 8% or better as the markets are at all-time highs and many feel the bear market is around the corner. Record low-interest rates set by central banks across the world provide little incentive to offer further big dividends for publicly traded companies. The tightening of debt and uncertainty has led many large companies to sit on massive amounts of cash reserves which have affected world economic growth by not deploying that cash.
Private equity can provide stronger yields as most private companies want to remain private and must provide the superior yield in exchange for private control. For this reason, entrepreneurs like to have investors out in 5 years by offering bonds or preferred shares as a method to raise capital. Once you understand the mindset of an entrepreneur or small business owner, you’ll see why this is the case. Even our little company has provided 8% returns each year to our investors.
We have no less than 8 investment opportunities that target 8% or better yields in different financial sectors that provide true diversity than over-concentration in one particular economic sector. To learn more, follow the 8 Ways to 8% links on this site.
As far as real estate, we feel that we offer alternative real estate investments that will outperform traditional real estate plays like REITs and greenfield developments. What do we like:
- Student Housing in Greater Vancouver Area
- Senior Housing specializing in dementia and memory care
- CarWash consolidation in the sunbelt states of the USA
- Urban self storage
A very strong growth opportunity is tech. We see high risk / high reward in the following sectors:
- Pharma software
- CRM systems to improve data collection for commerce
- Phone App for paying rent
Lastly, since September 2014, we’ve stayed away from the energy sector. In fact, at the end of 2016, we had less than 2% exposure to the energy sector. We see 2017 as a year that energy will have some great opportunities that we will be highlighting with our clients. We have an energy play that targets 8% annual yield with an equity kicker at exit if you agree with our assessment.
We look forward to continuing to be your private equity specialist.
Craig S Burrows ICD.D
President & CEO, CCO