August 2022 Alternative Investment News Round-Up

A push by state securities regulators to reform sales of non-traded REITs meets stiff resistance, even as the universe of publicly-traded REITs continues to shrink. Plus: Senate Democrats inch towards a deal to raise taxes, and how their proposed legislation would affect private equity. Read on for our curated list of the most important news for alts investors right now.

The Alternative Investment News Round-Up is a monthly digest of five “must read” stories from around the Web.

Industry

No IPOs, REITs Going Private: The Shrinking World Of Publicly Traded Real Estate (Bisnow)

“For a stock market investor looking to buy into the student housing sector — much like a college student who procrastinated finding an apartment for the fall semester — there could soon be no more options… That’s because American Campus Communities, the lone publicly traded student housing REIT in a segment that five years ago had three such companies, is set to be acquired by Blackstone in a deal announced in April and expected to close this quarter. This deal is part of a larger wave that has accelerated over the last year of public REITs being taken private by investment giants, as tens of billions of dollars have flowed into funds operated by firms like Blackstone, Starwood and KKR.”

Macro

Housing Hasn’t Been This Unaffordable In 15 Years (Bisnow)

“The national index dropped to 102.5 in May, the lowest it has been since July 2006, when it stood at 100.5. The current index also was close to July 1990, when it came in at 100.2. Both of those periods were characterized by rising home prices and high interest rates.”

Policy & Legislation

Alts groups oppose state regulators’ REIT reform (InvestmentNews)

“State regulators, the Securities and Exchange Commission and the Financial Industry Regulatory Authority Inc. have been increasing regulatory scrutiny of complex products like nontraded REITs. They are concerned that investors — and sometimes financial advisers — don’t understand the risks associated with products and can be harmed by purchasing them… As trade associations representing the alternative investment sector race to file their comment letters, here’s a spoiler alert: They hate the approach NASAA is taking.”

Biden’s ESG Tax on Your Retirement Fund (WSJ)

“ESG (environmental, social and governance) funds have trailed the market since the beginning of the year and are badly underperforming the sectors they shun, including oil, gas and coal… That may spur retirement fund managers to reconsider their commitments to ESG funds. But new ESG-favoring regulations may come to the rescue. Last year the U.S. Labor Department proposed a regulation that would tell retirement-fund managers to consider ESG factors such as “climate change” and “collateral benefits other than investment returns” when investing employees’ money.”

Inflation Bill Would Close the Carried Interest Loophole, Hurting Private Equity (Barron’s)

“In a surprise, Senate Democrats reached a deal on a bill late Wednesday that could have a huge effect on private-equity firms… Sen. Joe Manchin, D-W.Va. is now supporting a bill, the Inflation Reduction Act of 2022, that aims to address climate change, as well as cut the cost of health insurance and prescription drugs. It also plans to close the so-called ‘carried interest loophole.'”

Also: Reconciliation Update: Inflation Reduction Act of 2022 (IPA)

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