Thrift Maven

Real-Estate Veteran Sees a Rare Opportunity to Buy Quality REITs - Barron's

What do you think of TAO?


On Feb 01 09:36 PM Scott F wrote:

> Adding to the chorus of negative commentators, I have to say that
> the set of two closed-end funds they suggest are a joke.
>
> AWP was issued less than two years ago at $20 and is now at $3, but
> they are still charging 1.5% management fee annually to sit on the
> 20% of original capital they haven't lost yet. In other words they
> burned through $40 million dollars of investors' money so they could
> lose $4B in the process. What a great deal. Even though they recently
> cut their dividend by 78%, some suckers are still going to get lured
> by their 12% fictitious return-of-capital-esqu... yield. These guys
> are fools, and so will you be if you buy them, thinking you're getting
> something at a discount.
>
> IGR is slightly less horrible. It has the same rate of loss and nonsensical
> dividend but a less obnoxious excess management fee of 1.2%. It makes
> up for this with the riskiness of leverage.
>
> If you are still compelled to buy any of this crap, maybe on a trading
> basis, perhaps Seligman LaSalle International Real Estate Fund (NYSE:
> seekingalpha.com/symbo...) is a better bet. More reasonable
> management fee, given its size and a better discount. At least in
> its case half of its dividend is actually real, and its smaller size
> might make it more versatile. Same lousy return record, though. The
> only other CEFs that look rational are the Asian ones, RAF and RAP.
> But those are run by RMR Advisors, Inc., as incompetent a bunch of
> jackanapes as I've ever come across.
>