E 23: Revisit Intro to Alternative Assets - Deep Dive into Investment Structures

Alt Investing Made Easy

Summary
In this episode of Alt Investing Made Easy, Sarah Florer and Roland Wiederaenders provide a comprehensive overview of alternative assets, focusing on various business entities and their implications for investors. They discuss the importance of understanding investment structures, including corporations, limited liability companies, limited partnerships, and general partnerships. The conversation also covers management fees, carried interest, and the significance of investor rights and control in private securities deals.

Sponsored by:
Real Advisers, Austin, Texas

Special thanks to:

Grable Martin PLLC

Red Sun Creative, Austin, Texas

For more information: AltInvestingMadeEasy.com

Please contact us: [email protected]

Roland Wiederanders: [email protected]

Sarah Florer: [email protected]

Takeaways

• Understanding investment structures is crucial for investors.
• Corporations are formed by filing documents with the Secretary of State.
• Limited liability companies provide flexibility and limited liability.
• Limited partnerships have a general partner with unlimited liability.
• General partnerships expose all partners to unlimited liability.
• Management fees are typically based on assets under management.
• Carried interest is a performance-based compensation model.
• Tax treatment varies significantly between corporations and LLCs.
• Investors should inquire about their rights and control in deals.
• Conversion between entity types is possible and common.

Chapters

• 00:00 Introduction to Alternative Assets
• 03:13 Understanding Business Entities
• 05:53 Diving into Corporations
• 09:11 Exploring Limited Liability Companies
• 12:09 Limited Partnerships Explained
• 15:03 General Partnerships and Their Implications
• 17:46 Management Fees vs. Carried Interest
• 21:02 Comparing Corporations and LLCs
• 23:54 Navigating Investor Rights and Control