Rule 144a & Restricted Securities

Hi. I have a question for the Group. Sorry if this is too elementary.

I work for a hnw / institutional-like person purchasing restricted securities. This is his investment approach verses open market transactions.

The thought process is: why buy watered down, crappy equity securities or crappy preferred securites in the open Market, when you can get representation on the company's balance sheet, higher rate of return and better protection?

Yes, you give up liquidity, you are locked in for a term, you narrow the possiblity of repurchase agents, ect.

Where are we going wrong in this approach? Thanks for any insight!

2 Comments
 

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