60% of Chinese Investors Would Walk Away if Faced with Redeployment: New Poll
By Phil Cohen
In a very telling poll commissioned by Seattle Family Regional Center via EB-5 Sir (a China-based EB-5 social media platform), of the 681 investors surveyed, a surprising 60% indicated that they would prefer to withdraw their investments if possible, if faced with the need to redeploy their capital to another investment. A further 16.74% indicated that they were as yet undecided on what they would do. While a relatively large number of respondents to the poll (32%) indicated that they do not fully understand EB-5 redeployment policy, the numbers are still quite high.
Overall, there are a few implications for regional centers, if these figures are to be considered representative of the broader market:
- Regional centers should educate their investors on redeployment sooner rather than later.Helping investors to understand what is coming their way will ease the path to a redeployment process that is less likely to be challenged by investors.
- Walk-away investors, who would be willing to forfeit their entire EB-5 immigration status, may seem at first like a welcome headache relief for many regional centers who would rather not deal with redeployment, but if investors start walking away from any given regional center, then their long-term viability may come into question in the marketplace.
- Walk-away investors can affect redeployment investment choices and terms.If a significant number of investors walk away from an EB-5 deal, the New Commercial Enterprise (NCE) in charge of redeploying the capital, may face a less appealing array of investment choices that (and other terms such as fees) than what they face if they were working with a larger sum of money.
- According to the same poll, age-outs of investors’ children are an important influencing point; the addition of redeployment during an investor’s ‘sustainment period’ means that many investors will now unexpectedly see their children age out of the process before it is completed.In many cases they will see no point in moving ahead if their children can’t get their immigration status.
The EB-5 redeployment issue is one that includes many moving parts; regional centers and NCEs will be able to facilitate productive conversations with their investors if they understand their investment choices in advance, including the associated risks and returns.It is unlikely for most cases that an entire investor contingent will be happy with choices available to them, but starting the conversation earlier can only help in ensuring as many happy investors as possible, which can ultimately help to preserve the reputations of regional centers in the process.
See the survey results here: https://www.linkedin.com/feed/update/urn:li:activity:6501670639991128064
Phil Cohen is a Vice President at Altytude Advisors, and is an Investment Advisor Representative, in addition to serving as President of Strategic Element Inc. Phil has been involved in EB-5 as a service provider since 2010, and has recently expanded his EB-5 industry involvement by working with the team at Glide Capital (Glide) to launch the Altytude Advisors concept.
Altytude Advisors was developed to leverage Glide Capital’s (Glide) pre-existing platform of pre-vetted private debt funds, which has grown to $300 million in assets under management from high net worth and institutional investors.
Contact Phil Cohen (ext. 18) or Aaron Armstrong (ext. 20) to learn more about how the Altytude offering can provide an alternative approach to meet EB-5 redeployment needs.
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