Behringer Harvard, Prospect Capital Launch Investment JV
- Aug 02, 2012
With an eye toward tackling the challenges posed by the plethora of low-yielding fixed-income vehicles in the current financial environment, Behringer Harvard Holdings L.L.C. and Prospect Capital have teamed up on the launch of a venture. The new vehicle will center on the development, management and distribution of alternative investment programs.
“Both companies saw an opportunity to focus on investment alternatives with a focus on high-yielding debt and equity opportunities and saw in each other an opportunity to pair strategic investment expertise with distribution experience and access,” Behringer Harvard COO Jason Mattox told CPE.
Investments offered through the new vehicle will target “domestic debt and equity opportunities that, while unrelated to real estate, can meet the needs for portfolio diversification and income in this historically low interest-rate environment.”
It’s a partnership that brings complementary proficiencies to the table. Behringer Harvard is well known for its expertise in developing, managing and distributing global institutional-quality alternative investment programs. Prospect is well versed in managing and investing in high-yielding debt and equity investments, relying on private partnership structures and publicly traded closed-end structures. The companies will occupy co-advisor roles in the new venture, with Behringer Harvard spearheading capital-raising through its relationships with independent advisors and Prospect steering investment strategies for the programs.
“This joint venture enables both companies to leverage their competitive advantages,” Mattox noted. “The partnership is stronger, more competitive and has more experience to draw on than either company would have independently.”
Other investment managers and advisors are going down the same road. In July, BlackRock Inc. announced that it had entered into an agreement to form a strategic alternative investment relationship with Swiss Re Private Equity Partners AG.
The timing for such endeavors appears to be just right. As per a recent study conducted by Skybridge Capital and two financial magazines, 81 percent of the 925 registered investment advisors, registered representatives and other wealth managers surveyed noted that they are currently using alternative investments–including real estate, non-traded REITs and tax liens–for their clients, compared to 74 percent one year ago.
They have their reasons. “As market volatility continues to raise client concerns, alternative investments are gaining traction as a way to smooth out the highs and lows for investors,” according to the survey.