Chairman and CEO of Griffin Capital, Kevin Shields, was recently featured in a video segment sharing insights into several hot topics in the non-traded direct investment industry.
In an interview conducted by NAREIT’s Matt Bechard for REIT.com during REITWise 2015, a NAREIT conference held in Phoenix, Arizona, Shields discusses impacts of the customer account statement rule (FINRA 15-02), investment opportunities, and the Department of Labor’s (DOL) Fiduciary Standard proposal.
Shields says that financial advisors are preparing for FINRA 15-02 by anticipating the conversations they’ll have with clients who may be shocked after seeing that first statement once the rule goes into effect in April 2016.
In addition, he says that broker-dealers, sponsors, and the industry as a whole have been coming together to create new products that will minimize the impacts of the rule change. For example, Shields mentioned the creation of alternative share class structures with reduced front end loads that could pay a trail commission as a possible solution.
Specific to real estate, Shields says that despite capitalization rates compressing, his team still sees a lot of great opportunities on the buy side and have been deploying capital for Griffin’s non-traded REITs.
Griffin Capital recently launched a non-traded business development company (BDC) subavised by Benefit Street Partners, LLC, the credit arm of Providence Equity Partners, LLC, a private equity firm with $40 billion of assets under management. Shields noted, “There are a lot of interesting opportunities in middle-market lending.” Griffin is one of several sponsors known for commercial real estate investing to enter the BDC market place in the past year.
Lastly, Shields fears that the DOL’s proposed fiduciary guidelines could impact smaller investors. He says the rule “may box a lot of the smaller investors out of the financial services arena and those are probably the investors who need it the most.”
To see the entire interview, click here.