Mr. DuGan: W.P. Carey is an interesting company in that we have been in existence for a long time. We were founded in 1973; we have a terrific 30-year track record, and we manage approaching 10 billion in assets - and not many people have heard of us. I attribute this to two things. One, we have kept a low profile and just gone about our business, and two, we've done a very good job for our investors of providing predictable income and managing their investments through various cycles. Generally it's either the more spectacular winners in a good market and the more spectacular failures in a bad market that get all the press. We've been somewhere in between, just cranking through and providing steady, attractive returns for investors.
TWST: Explain for us your business structure, as Carey itself is not a REIT, but you buy and manage real estate assets for non-traded REITs.
Mr. DuGan: Our corporate structure is very similar to a variety of other investment manager corporate structures, in that we're actually structured as a partnership for tax purposes. This is quite common now for investment managers in the alternative investment space, and so we are in good company there. The corporate structure provides a vehicle for us to manage investments on behalf of investors in a niche of the commercial real estate industry, which is known as either net lease investing or sale-leaseback investing. It's a niche of the commercial real estate market that we've been in since 1973 in the United States, and we have been in this niche in Europe since 1998. We invest heavily in both North America and in Europe in this niche, which is probably most easily defined as purchasing and leasing back to a single company real estate assets that they typically have owned on their balance sheet and are looking to sell but continue to get use of. They do it as a form of financing, and we are able to buy these assets from companies, then lease the assets back to them on a long-term basis, and provide hopefully steady returns for our investors through this vehicle. Our funds are structured as real estate investment trust's, and the investors in the funds that we manage are typically different than the investors in the public company. The public company is publicly traded; the funds are publicly registered but non-traded. And investors find both vehicles, both the public company as well as the REIT fund vehicle, attractive investments but slightly different. And so they tend to be slightly different investor bases. But it's a structure that works very well. We're able to raise a good deal of capital today, and we're doing so on behalf of these third-party investors who are seeking attractive risk-adjusted, income-based returns. Our niche of commercial real estate suits that very well.
Tickers included in this excerpt: WPC
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