On January 5, 1989, 2nd Market Capital opened its doors to trade and arbitrage the inefficiencies of the nascent limited partnership secondary markets. For nearly a decade interests in commercial aircraft, cable television systems, sea containers, and, mostly, real estate equity and debt changed hands at steep discounts to intrinsic values. By about 1998, however, most of the partnerships were liquidated, merged, rolled-up, or, most commonly, converted to Real Estate Investment Trusts (REITs) to be traded on stock exchanges.
The conversion to publicly traded REIT status was intended to create liquidity for long-suffering limited partners, but the markets failed to take notice. Series after series of limited partnerships were rolled-up, converted to REITs and listed on an exchange. With increasing predictability, the newly minted shares traded at even deeper discounts than their counterparts experienced in the limited partnership secondary markets. Interestingly, the newly formed REITs were available in quantity.
Inspiration struck in December 1998 with the formation of New Realty Shares, L. P. While the NASDAQ mesmerized the rest of the world, we described the bonanza we saw in picking up these newly formed real estate issues on the cheap.
Over the ensuing decade, our best observation might have been that while financial markets are ultimately efficient in valuing the securities traded, the path to fair pricing deviates and the patient, astute investor can profit. Since New Realty Shares, 2nd Market Capital has syndicated and capitalized seven private investment funds dedicated to the sustaining prospect that REIT equities can be purchased at meaningful discounts to their intrinsic values.
Our analytical processes revolve simply around valuations of all issues in our investment universe with the objective of acquisitions that will deliver rising dividend income and capital appreciation. We confidently offer our services to individual investors through custodied Asset Management Accounts and to institutions through our bespoke hedge funds.
View disclosure information for 2nd Market Capital Advisory Corporation and our investment professionals by visiting the SEC Investment Advisor Public Disclosure website.
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