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  • Cityvest Catalyst Access Fund

    Long time lurker, first time poster. Is anyone getting in on the cityvest catalyst access fund? They're projecting big returns (IRR 30%), but I worry about the recent reports of poor communication, delayed distributions and K-1s, and high fees.

  • #2
    I know nothing about the underlying fund, but would not buy a fund primarily because they "project big returns."

    The additional fees you pay through CityVest are what they are. With most of their funds, it's the price you pay to get a lower minimum investment. What I've discovered over the years is that most docs who invest in these investments don't really need that lower investment more than once or twice and then they can meet 6 figure minimums and save those fees. But when the fees add up to 1.5%-2.5% a year, it makes you wonder if you should just wait until you can meet a six figure minimum. Hard dilemma that.

    Late K-1s are par for the course in this space. If you are going to invest in syndications and private funds, plan to file an extension every year.

    Significantly late and repeatedly late distributions are a big problem for me (but hopefully an isolated one for CityVest now that they have a new bank and processing company), as is poor communication. While you may have first heard about CityVest on this website, it's been a long time since WCI promoted anything of theirs and a big part of it was because I was sick of dealing with complaints about poor communication. I never really experienced poor communication myself, but I've discovered I need/want MUCH less communication from a sponsor/operator than many of my readers do. For example, one of my funds (not Cityvest) does a monthly 1 hour webinar. The last thing I need is an investment where I feel any need to watch a webinar every month. Imagine having 10 funds like that? It would be crazy. Send me a brief email when there's a problem, put my distributions in my bank account every quarter as expected, send me a K-1 by mid-summer, and treat my money like a fiduciary and I'm pretty happy. If that's not the case for you, you might want to rethink the whole idea of investing in private passive real estate at all. I mean, it's not like you can take your money out of most of these equity funds until they've run the course in 3-10 years. So who needs every detail? The only reason I care about that is when I decide whether to invest MORE money with that operator. Frankly, a lot of people complain about the customer service at Vanguard too, but it seems like every time I need something I can get it done there without too much hassle. It's been the same for me with the private fund managers I invest with.
    Helping those who wear the white coat get a fair shake on Wall Street since 2011

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    • #3
      Thanks for the detailed reply. I don't need constant updates either, but wondered if lack of replies was symptomatic of a bigger problem. I thought of investing directly in the underlying fund as well. However, Alan claims that through the access fund, we get a 12% preferred return instead of an 8% preferred return direct from the sponsor. Seems that would potentially off set the fees.

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      • #4
        Jim nailed it.

        Three years later and the hassle is not worth the benefit.

        I shudder to think how ludicrous it will be in another 3 years.

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