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The Firm...

Glasgow Investment Solutions is a boutique investment firm that provides guidance and access to the private equity markets for affluent investors.   fi

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I work diligently to understand your goals - and that is really what it all comes down to - understanding what you want your money to do for you.  Afterwards, decades of experience in both traditional wealth management and private equity is utilized to analyze your current holdings and make recommendations where appropriate.  Often times, portfolios can be enhanced by accessing sophisticated investments in the private markets that institutions, foundations, and the ultra high-net-worth have utilized for decades.  While these strategies may seem somewhat foreign at first, they are backed by common sense, prudent investment principles:​

 

Minimize Taxes     Enhance Returns      Reduce Risk

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Why Private Markets

Most investors, regardless of account size, are typically only invested in public stocks & bonds and their derivative structures (Mutual Funds, ETFs, CEFs, etc.).  These investment types have historically been very beneficial to individuals and should still maintain a significant/majority portion of most investor's portfolios.

 

That said, we began to see new trends at the beginning of this century.  The number of publicly listed companies has been shrinking over the last few decades as privately held companies stay private for longer or chose not go go public at all.​​​

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  • 2000-2022:  The number of public companies was reduced by 38% (7,810 to 4,814)

  • 2012-2022:  Private equity fundraising grew 21% compared to ~7% in the public equity markets

  • 2022:  87% of U.S. companies with revenues > $100 million were private  (18,000 private vs. 2,800 public)​

 

These are believed to be permanent structural shifts and investors need to consider the growing investable opportunity in private markets and how to access them.  Considering only publicly traded equities today means investing in less than half of the investable global market.  Many institutions, endowments, and ultra high-net-worth individuals began investing in the private markets over two decades ago.  This investment history was largely positive and is a useful guide when evaluating private investments for today's portfolios.  Until recently, gaining access to these types of investments was difficult without institutional type capital (typically $5mm+).​  Fortunately, more and more private equity firms are launching initiatives to work within the financial advisor networks to create investments for the high-net-worth & mass affluent segments of investors.  These investments are more palatable than in previous years due to:

  • Lower investment minimums

  • Simplified tax reporting

  • Enhanced liquidity

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Potential Benefits​

These investments are typically aimed at accredited investors, who are assumed to have the financial sophistication and capacity to handle the risks associated with private placements.  Here is an overview of the potential benefits of investing in Regulation D (Reg D) private placements.  Like any investment however, there are also risks that need to be evaluated. 

 

Diversification - Many private asset classes such as direct real estate and credit have different risk characteristics compared to traditional investments such as stocks and bonds.  This leads to greater diversification and a strong non-correlation, which is beneficial in downturns.  

 

Potential for Higher Returns

Income - Attractive yield distributions are a hallmark of many private equity investments.  Challenges in traditional banking have created significant lending opportunities and many private companies have stepped in to fill the void.  This can be potentially beneficial for clients as it diversifies their income portfolio and provides yields typically higher than those available in the public markets. 

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A few examples:

  • Senior secured loans made to lower, middle, and upper market companies

  • Private real estate has historically provided stable cash flows through lease obligations.  

  • Private credit has shown track records of equity-like returns with moderate drawdowns.  Additionally, this often encompasses floating rate debt which is less sensitive it interest rates.  I

 

Growth - Certain types of real estate and other private investment strategies have the potential to generate very robust returns.  Examples include value add real-estate, venture capital, and infrastructure investments.

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Tax Implications - 1031 Exchanges utilizing Delaware Statutory Trusts (DSTs) are a terrific way to defer taxes (depreciation recapture and capital gains).  Additionally, many other real estate investments take advantage of depreciation which is passed on to the investor.  After all, it's not the amount of money you receive, it's the amount of money you keep after paying taxes.​


Less Market Volatility - Since these securities aren't publicly traded, they are less subject to daily market fluctuations, which provides a different risk profile compared to public stocks and bonds.  

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Risks and Limitations of Private Investments


Liquidity - Private placements are generally illiquid, meaning capital might be locked in for an extended period.


Inherent Risk - High potential returns come with different risk profiles which must be evaluated.  It is a must to read the Private Placement Memorandum(s) and other required disclosures prior to investing.  


Accreditation - Only accredited investors, with specific income or net worth criteria, are generally allowed to invest, limiting accessibility.​

Process

Building

1

Introductory Evaluattion

I work diligently to understand as much as possible about you and your financial situation.​

  • Tax Situation

  • Risk Tolerance​

  • Investment Horizon

  • Investment Objectives

  • Liquidity Needs​

2

Portfolio Analysis

I use sophisticated financial planning software to analyze your current portfolio.  Using the information gathered in the introduction, I then make recommendations if it is appropriate.    

 

The goal here is always to enhance what you currently have - not replace your existing portfolio.  

Implementation

I will work with your financial team (accountants, attorneys, other financial advisors, etc.) to implement the solutions that you agree with.  Taxes are always top-of-mind and a key consideration when making any financial changes.  

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4

Monitoring  & Communication

Perhaps the most important step is monitoring the performance of your investments and maintaining clear and timely communication in good markets and bad.  

5

Ongoing Analysis

As we all know, life is not static - changes do occur necessitating re-orientation at times.  I will be here to advise if and when that occurs. 

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