A Reflection on Our Recent Webinar
By Vanessa Wieliczko, Director of Investments at HoyleCohen
With rates near zero, traditional fixed income continues to present challenges to investors seeking portfolio diversification and income. This trend has been at play for years and is likely to continue for some time. Consequently, we continue to seek alternative sources of income.
We began investing in W Financial Fund, LP (W Fund) in 2011 and the Fund remains a recommended opportunity today for suitable clients. In a recent webinar, HoyleCohen Associate Portfolio Manager, Robert Lopez was joined by W Financial Co-Founder Gregg Winter and his team to discuss the current state of W Fund, the lending environment and other related topics.
Senior Loan Officer, Jarret Schochet, described the underwriting approach behind the Fund’s first mortgage bridge lending strategy, why bridge loans are useful to borrowers, their process of vetting borrower’s track records, and the loan portfolio’s growing geographic diversification.
W Financial Fund has a strong track record, investing through several different economic environments dating back to its 2003 inception. W Financial Partner and Chief Investment Officer, David Heiden, described the current landscape for bridge lending, and opportunities resulting from the pandemic induced economic disruption. Over the years, they’ve encountered their share of challenges, including loan defaults – all of which were successfully resolved, resulting in significant positive results for the fund and its investors.
In part, we believe the Fund’s historical success has been supported by the manager’s strong emphasis on property and borrower due diligence. Members of the lending team continue to travel nationwide as needed, to meet borrowers and vet locations and properties. Additionally, risk mitigation strategies play a key role on an ongoing basis. This includes maintaining low loan to value ratios, requiring independent 3rd party appraisals, conducting comprehensive background checks, obtaining personal guarantees from borrowers, limiting borrower concentration, instituting holdbacks for future capital investment, and exploring multiple exit plans.
While maintaining structure and integrity of process has been key, the ability to adapt has been important as well. When tax laws were changed in 2017, the managers were quick to explore opportunities for taxable investors to keep more of what they earn. Chief Financial Officer, Adam Windwer, provided additional details, describing the benefits resulting from the fund’s conversion a REIT structure one year ago.
To qualify for investment in W Financial Fund, investors must meet certain regulatory requirements including meeting the Accredited Investor and Qualified Client standards as defined by the U.S. Securities and Exchange Commission (SEC).
The information and data shared here is for illustrative and informational purposes only and nothing herein should be interpreted as investment advice. It should not be assumed that future performance of any specific investment or investment strategy will be profitable. All information contained herein is accurate to the best of our knowledge and is based on our reliance on materials provided directly by the investment manager. All investments carry the risk of loss, including the permanent loss of principal. Past performance is not a guarantee of future results.
Gregg Winter: Founder & Managing Partner, W Financial
Gregg Winter founded W Financial in 2003, having spent the prior 14 years syndicating individual mortgage loans among groups of private investors. He is also the owner of Winter & Company, a commercial mortgage advisory firm founded in 1989. With over 29 years of real estate advisory and lending experience, Gregg is recognized as a leading lender and commercial debt and equity advisor in New York. Prior to launching Winter & Company and W Financial, Mr. Winter had also served as a principal of W&W Associates, Inc., a family-owned New York mortgage investment business established in 1963 by his father, Jack Winter. Mr. Winter is a member of the Finance Committee of the Real Estate Board of New York, is a member of the Real Estate Lenders Association, and is a New York State Licensed Real Estate Broker. He graduated magna cum laude from Long Island University.
Robert Lopez, MSF, CAIA: Associate Portfolio Manager, HoyleCohen
Robert Lopez serves as an Associate Portfolio Manager in HoyleCohen’s Investment Department. Robert is an active member of the firm’s Investment Committee often leading meetings and investment discussions, and plays an integral role in the future growth and development of investment management strategies of HC. Robert also assists in diligence reviews, core model research and drafting investment related collateral and client communications, as well as maintaining internal records. Robert’s role also sees him working closely with Advisory teams to provide portfolio management recommendations.
Robert holds a Bachelor’s from the University of California Los Angeles, a Master’s from Northeastern University and a Chartered Alternative Investment Analyst (CAIA) designation. Active in the community, Robert serves on the board as Treasurer of the UCLA-SD Alumni Network.