Last month, Hamid Moghadam, CEO of AMB, spoke to my Wharton West class. He was a remarkable speaker.
AMB is an industrial REIT that has a private subsidiary whose existence is a puzzle to me. The REIT and the subsidiary share profits until the subsidiary reaches a return target, after which the public company gets the lion's share of the profit. In other words, the public and private companies split the risk, but the public company has more upside potential. This makes no sense in a Modigliani-Miller world (or any reasonable world, for that matter).
The benefit of the private company in this context is that it is not priced every day. Managers of institutional portfolios like this, because they don't have to report losses until they are realized. With stocks, managers can be measured on a minute-to-minute basis. Chris Mayer at Columbia, who knows more about this stuff than I, confirms that this can be a motivator for how fund managers choose their investments.
Subscribe to:
Post Comments (Atom)
1 comment:
That's Right i am agreed with this article. I think it is very precious article for us and we are getting lot of knowledge from these websiete. I think it's an excellent article. I have learnt so many things from this website also it is very helpful for job search.I also agree with Joshua about tourists and visitors. Libraries are a key attraction for tourists and bringing in tourists brings in revenue for businesses, which in turn creates jobs and improves the tax base. While I can understand the challenges some cash-strapped small libraries with high tourism could experience, doing what you can to accommodate visitors brings welfare to everyone in town. It can also be a useful avenue to request grant funding from government agencies
Great post and I look forward to reading more! :) Thanks a lot for your precious Advice!
Sydney
Equity Loans
Post a Comment