Will 2015 be remembered as the year when the economy finally fully recovered? Was 2014 indeed a “breakthrough year” as President Obama labeled it in his optimistic State of the Union address? Time will tell, but one thing is clear—2014 was the best economic year we have seen in a while and it set the stage for a strong 2015.
With our first edition of The Capital Issue in 2015, we take a look at several ways organizations can grow and improve their business. Our feature article details the various elements of the capital stack and how borrowers can access capital to achieve their goals. The hospital article provides case studies on how small and critical access hospitals are obtaining funding for expansion and renovation projects. The senior living article examines the increased interest in seniors housing properties by outside investors driven by an attractive asset class risk profile. With our housing article, we take a look at recent developments and trends while our Fiduciary Focus article identifies how organizations can improve their retirement plans.
Please let us know if you have any questions by reaching out to the authors as well as our bankers for answers. And here’s to a great 2015!
Tom Green, CEO
The Capital Issue: February-March 2015
When thinking about how to fund the capital needs of a business, two primary sources generally come to mind: debt and equity. The debt is generally assumed to be in the form of a senior secured term loan from a commercial bank, bonds or notes, or government agency or government-sponsored enterprise (GSE) financing. The equity is typically derived from the personal liquidity of the owner of the business.
Almost one fifth of the U.S. population lives in a rural area. Small and critical access hospitals play a vital role in rural areas and are likely to offer services that otherwise would not be accessible to residents. As a result, these hospitals may be required to expand and/or renovate their facilities in order to provide additional service lines, adjust the amount of outpatient and inpatient services and improve operational efficiencies and patient amenities.
The senior care industry has recently seen increased interest from outside investors, developers and debt and equity providers. The specific reasons may vary by participant, but broadly speaking this increased interest is driven by an asset class risk profile that has gained acceptance by the capital markets, more so today than in prior years.
Stability and uncertainty—two seemingly contradictory terms. But in the context of the affordable housing industry’s outlook for 2015, the two could not be more in sync.
Market volatility over the last several years has highlighted the need for prudent investment decisions if defined contribution pension plans are to provide an adequate source of lasting retirement income. The difficulty of these decisions can be amplified when there is a conflict of interest that exists between service providers and plan sponsors and/or participants. The Employee Retirement Income Security Act (ERISA) requires that fiduciaries of employee benefit plans administer and manage their plans prudently and in the best interest of the plan’s participants and beneficiaries.
The Fiduciary Focus