Anyone has invested with Open door capital? How was your experience?

[Hemal Adani]

Hi, I'm curious to learn how your experience has been with Open door capital or something similar. Pros & Cons. Also post if you know something similar.

[Henry Clark]

LPs the point of the previous questions is all of us fail.  That is part of the cost of investing.  There is no Passive investing.  If we don’t learn from our mistakes we will have failed twice.  What changes have you done to your due diligence checklist?

Asking if you like or dislike a fund is just following the cow herd.
     
The stock market has been on a tear.  But if you risk adjust the returns it is a poor investment.  Just people following other people.  

[Chris Seveney]

Quote from @Henry Clark:

LPs the point of the previous questions is all of us fail.  That is part of the cost of investing.  There is no Passive investing.  If we don’t learn from our mistakes we will have failed twice.  What changes have you done to your due diligence checklist?

Asking if you like or dislike a fund is just following the cow herd.
     
The stock market has been on a tear.  But if you risk adjust the returns it is a poor investment.  Just people following other people.  

 I just recorded a podcast episode with an investor who is a GP and LP and we were discussing that topic. When distributions pause, what went wrong and what is the plan. Not every pause is a bad thing as sometimes the GP if experienced can work it out and the reason they are doing it makes sense.  what really needs to be reviewed is why is it not going well and what is the plan - its very different plan when you cut distributions and do a capital call  to hold $4M to lower your debt obligation to allow for a refinnance compared to needing a capital call because you are only at 80% occupancy and anticpated 95%, rents are 50 cents a square foot less than you wanted and expenses are 25% higher....

[V.G Jason]

Quote from @Chris Seveney:

Quote from @Jay Hinrichs:

Quote from @Evan Polaski:

@Hyun Supul, without diving too far into this, and the devil is always in the details, when I see this, I can't help but assume this whole offering is a way to for them to raise pref equity for their own deals, but wait, that won't look too good, so let's layer in some private credit, too.

It says it will lend money AND invest pref equity into MF deals owned by Disrupt and Open Door Capital.

Questions to ask: what allocation is going to loans versus pref equity in their own deals?  Why do their deals need capital infused, and are those reasons due to poor management or things that were truly out of their control and/or could not have been foreseen at acquisition?

On the loans side, who is the lender JV? What is their book of business? Is this lender going to sending money back, as second mortgages to ODC/Disrupt deals?

@Chris Seveney, I can only imagine two things here:
1. They are lending to people who are so desperate they will pay 16+% for the loan.  Which in itself gives me major pause, because these rescue capital loans almost never work out.

2. They aren't making money on the loans and the true business driver is the pref equity raise for their own deals.  It allows them to keep those afloat and can collect fees on that side by retaining ownership of the deal.

OH gosh I just read this and this is what led a company I worked for in the 80s into a massive BK loaning between partnerships.. Not sure about this I hope they can pull it out. 

 Do not quote me on this but I think someone told me the new fund was a debt fund (along with some other asset classes) and a percentage of the money raised was to invest in their other funds (ie. instead of capital calls).  This is what I heard third hand, so not sure if it is true but i believe the person got this from the PPM which was noting where the monies were going. 

I know the "survive till 25" crowd was banking on interest rates going down to the 4's or low 5's next year and that was going to save these deals. If that is the case, I unfortunately do not see that happen.

What do others think?

 It's going to 5%, they are right. The 10 year treasury is.