Читать книгу Alternative Investments - Hossein Kazemi - Страница 17

Exhibit 1.2 illustrates the concept of structures. On the left-hand side is the ultimate source of all investment returns: real assets and the related economic activity that generates and underlies all economic compensation to investors. The cash flows from those assets emanate toward the investors on the right. The placement of the second box illustrates conceptually the idea that various structures alter, shape, and otherwise influence the flow of the economic benefits of the assets to the ultimate investors. The five major types of structures are listed in no particular order: regulatory, securities, trading, compensation, and institutional. The third box lists the types of investment claims that receive the altered cash flows: traditional investments and alternative investments. Finally, at the right are the ultimate recipients of the economic benefits: the investors.

Exhibit 1.2 Structures Distinguish Alternative Investments from Traditional Investments

For example, the underlying assets on the left-hand side of Exhibit 1.2 might include chains of hotels. Some of those hotels are ultimately owned by investors as shares of publicly traded corporations, such as Hyatt and Marriott, which are usually considered to be traditional investments. Other hotel investments, such as those owned by investors as real estate investment trusts (e.g., Host Hotels & Resorts Inc.) and those held privately (e.g., Omni Hotels), are usually considered to be alternative investments. Exhibit 1.2 illustrates the differences between these hotel ownership methods as being the structures that transform the attributes of ownership through institutional effects such as public listing, regulatory effects such as taxes, and compensation effects such as managerial compensation schemes.

The primary point of Exhibit 1.2 is that structures alter the flows of cash from their underlying source (real assets) to their ultimate recipients (investors). In most corporations, the cash flows from the firm's assets are divided into debt claims and equity claims by the firm's capital structure. This is a common and important example of a structure: in this case, a securities structure. Structures define the characteristics of each investment; viewing investments in the context of these structures provides an organized and systematic framework for analysis.

The exhibit is not intended to portray all investments as being influenced by all five structures. Some investments, such as a vegetable garden used for personal consumption, are not substantially subjected to any of these structures. In this example, there are no securities involved, there would typically be no important legal structures or issues, there is no investment manager layering a sophisticated trading strategy on top of the garden's output, and so forth.

Some investments are substantially subjected to only one or two structures, and some investments are subjected to most or all. Investments can also be subjected to multiple layers of one particular type of structure, such as securities structures. For example, the economic rights to a residential property are often structured into a mortgage and the homeowner's equity (residual claim). The mortgage might be sold into a pool of mortgages and securitized into a pass-through certificate. The pass-through certificate might be structured into a tranche of a collateralized mortgage obligation (CMO) that is in turn held by a mutual fund before finally being held by the ultimate investor in a mutual fund inside a retirement account. Thus, an investment may have various and numerous distinguishing structures that identify it and give it its characteristics. The goal is to use this view of structures to clarify, distinguish, and organize our understanding of alternative investments. The following paragraphs provide an overview of the five primary structures related to alternative investments:

1. Regulatory structure refers to the role of government, including both regulation and taxation, in influencing the nature of an investment. For example, hedge funds (but not their managers) are often less regulated and typically must be formed in particular ways to avoid higher levels of regulation. Taxation is another important feature of government influence that can motivate the existence of some investment products and plays a major role in the transformation of underlying asset cash flows into investment products.

2. Securities structure refers to the structuring of cash flows through leverage and securitization. Securitization is the process of transforming asset ownership into tradable units. Cash flows may be securitized simply on a pass-through basis (i.e., a pro rata or pari passu basis). Cash flows can also be structured through partitioning into financial claims with different levels of risk or other characteristics, such as the timing or taxability of cash flows. The use of securities and security structuring transforms asset ownership into potentially distinct and diverse tradable investment opportunities. The nature of this transformation drives and shapes the nature of the resulting investments, the characteristics of the resulting returns, and the types of methods that are needed for investment analysis. On the other hand, lack of easily tradable ownership units can drive the selection and implementation of investment methods.

3. Trading structure refers to the role of an investment vehicle's investment managers in developing and implementing trading strategies. A buy-and-hold management strategy will have a minor influence on underlying investment returns, while an aggressive, complex, fast-paced trading strategy can cause the ultimate cash flows from a fund to differ markedly from the cash flows of the underlying assets. The trading strategy embedded in an alternative asset such as a fixed-income arbitrage hedge fund is often the most important structure in determining the investment's characteristics.

4. Compensation structure refers to the ways that organizational issues, especially compensation schemes, influence particular investments. Thus, in the case of a hedge fund, compensation structures would include the financial arrangements contained in the limited partnership formed by the investors and the entity used by the fund's managers. Such arrangements usually determine the exposure of the fund's investment managers to the financial risk of the investment, the fee structures used to compensate and reward managers, and the potential conflicts of interest between parties. Compensation structures within investments, especially alternative investments, have implications for the agency costs generated by owner-manager relationships.

5. Institutional structure refers to the financial markets and financial institutions related to a particular investment, such as whether the investment is publicly traded. Public trading or listing of a security is an essential driver of an investment's nature. Other institutional structures can determine whether an investment is regularly traded, is held by individuals at the retail level, or tends to be traded and held by large financial institutions such as pension funds and foundations.