Anyone with experience investing in a note fund?

[Kelly Byrd]

Hi, I joined a while back but have been quiet. I have spent a bunch of time researching RE notes and looking at various ways to get exposure to this asset class. I don't yet want to actively trade notes myself, so I'm evaluating a few different private placement note funds.

In an effort to vet the funds and the teams behind them, I am hoping to connect with BP fols that have personal experience investing in funds offered by Colonial Capital Management or note funds in general. Please reply here or send a private message.

[Dean Dubach]

Hi Kelly,   I am in both the Colonial and PPR funds, and have been for a bit more than a year for each.   I have been very pleased with both.  

Colonial pays quarterly, I believe they have a base rate and a split of profits, so if they have a good quarter, you share in the upside. That said, the opposite could be true with a bad quarter, but I have not experienced that.....  Over the course of the year, I have experienced a higher return with Colonial than PPR.   The Colonial fund has a higher minimum investment and allows you to re-invest earnings.

The PPR fund pays earnings on a monthly basis, and does not, at least in the fund I am in, allow re-investment of earnings.   

Both funds have a three year lock, so you are sacrificing liquidity with funds.     In my mind, since I do not need the income at the moment, I prefer the ability to reinvest the earnings.    But I am in PPR's due to the lower minimum investment which let me put some dry capital to work.  

Of course having capital split among several providers also allows a bit of diversification in terms of management.  I choose to invest in the funds as its a write a check and receive income, about as easy as it gets.    My experience with both has been positive, and I would not hesitate to add funds to either fund.    

Please double check what I have stated with each supplier, as I have stated what I experienced a year ago and the policies of the providers listed may have changed.

Best Regards, Dean