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Triloma Provides an Update on the Future of the Firm

Triloma Securities, a broker-dealer based in Winter Park, Florida with 14 wholesalers, plans to shut its doors by the end of the year, according to a report by Investment News.

It was recently reported that Triloma Securities, a broker-dealer based in Winter Park, Florida with 14 wholesalers, planned to shut its doors by the end of the year. The DI Wire had a chance to discuss with a representative from the company, where Triloma is today and the changes its plans to make to its business moving forward.

Larry Goff co-founded Triloma Financial Group, an investment firm focused on alternative investments, in 2012 after spending 26 years at CNL Financial Group. He was instrumental in establishing CNL’s capital markets group and helped the firm raise billions from the independent broker-dealer space. Since its founding, Triloma Financial Group has engaged in two separate businesses: investment management and capital markets.

Going forward, Triloma Financial Group plans to continue its activities as an investment manager and expand by focusing on more traditional private equity investment opportunities.

The company plans to target more opportunistic investments in real estate and senior housing, as well as investments in restaurant and other private operating companies, similar to those the team members sourced, acquired and/or operated prior to launching Triloma.

Currently, Triloma has one senior housing and two restaurant acquisitions under letter of intent, all of which it hopes to close before year-end.

“We believe that in today’s low cap rate environment, these types of investments will provide more attractive income and growth opportunities for our investors than more traditional real estate opportunities,” said Tracy Garbers, senior vice president of marketing of Triloma Financial Group. “Given the varied types of investment opportunities we are currently pursuing, going forward we expect to source more capital outside of the broker-dealer channel, including from RIAs, high net worth individuals, family offices and institutions.”

Triloma Securities launched in 2015 to focus on the wholesale distribution of alternative investment funds in the broker-dealer channel and raised more than $650 million, however, Garber noted that “raising significant capital in the broker-dealer community requires a large capital markets team and constant deal flow.”

Garber explained, “Given the limited number of attractive real estate opportunities, combined with the continued uncertainties in today’s broker-dealer channel, we believe that the scalability of the wholesale broker-dealer business model is challenged for smaller boutique firms like ours. That is why, at this point, we are scaling Triloma Securities back to a much smaller team, even as we continue raising capital for our current seniors housing offering.”

In March 2018, the boards of Triloma EIG Energy Income Fund and Triloma EIG Energy Income Fund – Term I, two unlisted investment companies focused on privately originated energy company and project debt, approved plans of liquidation, according to a prospectus supplement filed with the Securities and Exchange Commission at that time.

The Triloma EIG funds suspended their offerings “due to market conditions” and subsequently filed their de-registration statements with the SEC last June.

Also in June 2018, Triloma partnered with private equity firm Kingsbarn Realty Capital, through its affiliated sponsor KB Exchange Trust, to distribute KB Diversified Healthcare DST 20, a Delaware statutory trust offering. Other than this single deal, the companies have not partnered on subsequent offering.

Garber noted that Triloma Financial Group “may transition to an outsourced, variable cost approach where it can still maintain access to the broker-dealer channel where appropriate (e.g., for certain income- and tax-oriented real estate opportunities) without the need to permanently maintain a large capital markets team.”

Goff is currently licensed with International Assets Advisory, which could one day serve as one of Triloma’s outsourced broker-dealers and also provide direct access to retail clients.

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