Central to a credit view of investing, is understanding that the quality of your credit process determines your eventual sucess far more than an individual’s good instincts or fortune. That’s why the foundation of the credit platform is the methodical processes used to make sure every issue is raised, every eventuality examined, and every risk considered.
- Identification of Transactions / Sourcing and Original Transaction Screening. The Fund takes advantage of Wrightwood Capital’s deep access to transactions through its its extensive network of real estate industry contacts.
- Investment Review and Conversion. Transactions that meet investment parameters will be structured, priced and negotiated by experienced investment officers.
- Due Diligence. Due diligence and underwriting is performed by the Underwriting Group. They examine the market, borrower or partner, project, property condition, property economics, business plan and capital structure. Property and market inspections occur at this stage and an investment memorandum is prepared for submission to the Investment Committee.
- Investment Approval. The Investment Committee is comprised of Wrightwood Capital’s CEO and Managing Directors. Each of the Investment Committee members has in excess of 18 years of industry experience. The Investment Committee will either reject or approve, and if approved, the investment may be subject to necessary modifications.
As illustrated in the process map above, the level of serveillance and management changes as the performance of any individual asset changes, allowing Wrightwood Capital to pioritize efforts and improve the performance of the overall portfolio.
- An asset manager is assigned to monitor and manage each investment and during monthly meetings each investment is discussed in detail. Full progress summaries are provided to senior management on a monthly basis.
- Issues are identified and action plans are implemented and updated on a weekly basis, if warranted. The asset manager is charged with identification of business plan and/or market issues in early stages and timely communication of such to the borrowers or partners and interest holders.
- The asset manager maintains close contact with the borrower or partner to ensure efforts to meet the business plan are consistently on-track. Periodic site visits allow portfolio management to maintain a comprehensive overview of each asset.
- As a Standard & Poors’ approved servicer Wrightwood Capital has the skill set and competency to manage all types of investments, including the special servicing of distressed situations.
The process and procedures, along with the staff allocated for Wrightwood Capital’s investment and management activities add up to a solid platform to effectively invest in middle market commercial real estate through credit products.