1. What is the nature of your business?
Pier 4 is a Real Estate Investment Trust specializing in the acquisition of multi-residential apartments in various Canadian cities. As owner-operators, we emphasize long-term asset ownership to foster value creation. We strategically acquire assets in key markets and enhance their value through various capital expenditure initiatives. Our overarching objective is to establish ourselves as the top choice for investors seeking opportunities in the low and mid-rise multi-residential asset class within the Canadian real estate market.
2. What do you primarily use the capital raised for?
Our company utilizes the raised capital to acquire multi-residential properties located in robust secondary markets outside major urban centers. Additionally, we allocate funds to enhance the assets within our portfolio through renovations and capital expenditure projects.
3. Why do you choose to raise money from EMDs rather than on your own?
We opt to raise funds from EMDs and other capital partners because we believe in the power of focusing on one's strengths. Our capital partners excel in investor relations and fundraising for investment opportunities such as Pier 4, while we at Pier 4 specialize in acquiring and managing multi-family properties. We value supporting our partners to facilitate their business growth, as they reciprocally aid us in advancing our own ventures.
4. Why stay a private company instead of becoming a public company?
Private equity investors are generally paid through distributions rather than stock accumulation, with these distributions usually received periodically throughout the duration of their investment. This payment structure allows for a steady flow of returns over time.
Private companies, as opposed to public companies, enjoy significantly more control over their operations, management, and strategic direction. This autonomy stems from not being answerable to public shareholders, enabling private firms to make decisions that align with their long-term growth objectives without the immediate pressures of meeting quarterly earnings expectations.
Moreover, private companies benefit from enhanced flexibility in decision-making. This flexibility allows them to focus on long-term growth strategies without the constraints of short-term financial performance demands. Additionally, private companies maintain a higher level of confidentiality compared to their public counterparts. They are not mandated to disclose as much operational and financial information, allowing them to safeguard confidentiality and sensitive data.
In contrast, the decision to go public can be a costly endeavor due to expenses such as underwriting fees, legal fees, and compliance costs associated with listing on stock exchanges. Furthermore, public companies are subjected to market volatility and fluctuations driven by investor sentiment, which can impact stock prices and influence corporate decision-making.
5. Over the past several years, many changes have been made to the exempt market rules and regulations. What is the biggest change you have seen and explain how it has affected your business.
Key protection measures under the offering memorandum exemption encompass several facets:
Non-reporting issuers are mandated to provide investors with audited annual financial statements and a yearly report detailing how the funds acquired through the offering memorandum exemption were used.
Marketing materials must be seamlessly integrated by reference within the offering memorandum. This integration ensures that their liability aligns with the disclosures present in the offering memorandum, particularly in cases of misrepresentation.
Additionally, all investors engaging in this process are required to formally endorse a risk acknowledgment form as a standard procedure to recognize and accept associated risks. These measures collectively work towards enhancing transparency and safeguarding investor interests within the offering memorandum framework.
6. What do you think of the reporting regime in the private markets?
The reporting regime in the private markets presents a unique set of considerations compared to public markets. Here are some perspectives on the reporting regime in private markets:
- Confidentiality: Private markets offer a level of confidentiality that public markets do not. Companies in the private markets are not required to disclose the same level of information publicly, allowing them to maintain more privacy regarding their operations and financial status.
- Flexibility: Private market reporting requirements can be more flexible since they are not subject to the same stringent regulations as public markets. This flexibility can allow companies to tailor their reporting to the specific needs of their investors and stakeholders.
- Investor Relations: Reporting in the private markets is crucial for building trust and maintaining relationships with investors. Clear and transparent reporting practices can enhance investor confidence and attract potential investors to participate in private market opportunities.
- Regulatory Landscape: Private market reporting is subject to regulatory constraints that vary across jurisdictions. Understanding and navigating these regulations is essential for complying with legal requirements and ensuring transparency in reporting practices.
In summary, the reporting regime in private markets offers confidentiality and flexibility. Effective reporting practices can play a significant role in fostering trust, attracting investors, and supporting sustainable growth in the private market space.
