04/22/2022 | by
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Capital flow of non-traded alternative investments could grow to a $250 billion a year market within the next five years, with early 2022 data already pointing to a record-breaking year for fundraising in the sector, according to the Institute for Portfolio Alternatives (IPA).

Speaking on the REIT Report on April 18, Anya Coverman, SVP, government affairs and general counsel at IPA, said the outlook for 2022 is “incredibly bright. You have Blackstone, Starwood, and other large asset managers leading with a blockbuster year.”

Citing research data from Robert A. Stanger & Co., Coverman said sales overall are topping $19.1 billion in January and February. “So, this is already on pace to beat last year's record tally of $70 billion.”

Coverman said that this year IPA will be actively educating regulators at the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) about new innovations and current data about portfolio diversifying investments.

Gina Gombar, IPA’s newly-appointed VP of government affairs and associate general counsel, added that IPA is continuing to engage with regulators and policy makers on the significant changes seen in the non-listed REIT industry. Over the past decade, those changes have included improved liquidity, more transparency, independent expert involvement in valuations, enhanced governance, and more investor-friendly compensation structures.

Coverman discussed the SEC’s unprecedented broad swath of regulatory proposals and noted that IPA and other real estate organizations are asking the regulator to extend the length of comment periods, given that the proposals could result in significant shifts in industry operations and practices.

Other topics Coverman and Gombar discussed included:

  • Activity on the state regulatory level, especially activity by the North American Securities Administrators Association (NASAA).
  • Anticipated fiduciary proposals, including recent regulatory focus on complex products.
  • IPA’s work on legislation that would expand opportunities for individual foreign investors to invest in U.S. based non-listed REITs and crafting a legislative solution to facilitate the inclusion of a modest allocation of alternative investments to enhance retirement outcomes for defined contribution plan participants.
  • IPA’s work to maintain the deferral gain from like-kind exchanges.