November 26 2014
Allegiancy CEO Steve Sadler shares what new Regulation A+ rules will mean for investors
Sadler explains value of new offerings to brokers at fall securities conferences
RICHMOND, Va – Allegiancy CEO Steve Sadler recently spoke at two investment conferences about a national revolution that he believes will usher in a new era for investors.
As part of the Jumpstart our Business Startups (JOBS) Act, the U.S. Securities and Exchange Commission (SEC) is expected to announce the new rules for Regulation A+ (Reg A+) shortly.
Allegiancy, a Richmond-based commercial real estate asset manager, plans to be one of the first companies in the nation to offer $20 million in preferred equity securities under the new rules. As such, Allegiancy’s CEO spoke at two fall investment conferences, including Moloney Securities Annual Meeting in St. Louis, and Oak Tree Securities Fall Conference in Lake Tahoe, Nevada.
Moloney’s meeting included more than 125 registered representatives and registered investment advisers (RIAs), who discussed the progress of Allegiancy and its next offering under Reg A+, among other issues. Moloney helped Allegiancy raise $5 million for its first issue under Reg A as well.
The Oak Tree Securities annual conference brought its representatives together for three days to hear presentations from selected firms. Financial product representatives asked questions and got to know the companies’ leaders.
At both events, Allegiancy CEO Steve Sadler talked about the potential of the new Reg A+ rules for investors. “Reg A+ is about giving regular folks access to investments that private equity funds and only a handful of accredited investors have enjoyed up until now.”
Reg A+ will increase the amount a private company can raise through a public securities offering from $5 million to $50 million in a year, as well as allowing non-accredited investors to buy in. Earlier this year, Allegiancy offered $5 million in securities under Regulation A to be poised for Reg A+. The company’s results for its investors have been impressive: it offered a dividend on the day it began active trading, July 15.
Reg A+ eliminates limits that have prevented smaller investors from gaining access to private security offerings. For example, regarding Allegiancy’s Regulation A offering, Sadler said: “Our little company will pay out six percent dividends, or $300,000, in the first year to savers and investors who have entrusted us with their capital under Reg A. To have this kind of alternative, even for a portion of your retirement portfolio, is meaningful.”
At the Moloney and Oak Tree conferences, Sadler also talked about the future of securities from a broker’s perspective, with the theme being that Reg A+ will create a new class of securities, for which the expertise of an investment adviser will be highly valued.
“Because companies doing offerings under A+ will be smaller or in the earlier stages of growth, the value of a broker’s expertise will be much higher than for traditional public offerings, which are typically already covered widely by Wall Street analysts,” said Sadler.
“An advantage of the Reg A+ companies is that they likely will be ‘closer to the ground’ — that is, the products they make will touch people’s lives. “The company that fills your propane tank could easily become a Reg A+ company.” Sadler said. “From an investor’s perspective, these are companies that people will understand and connect with.”
What Reg A+ will also mean for investors is an earlier entry point, so that they are not waiting for the mega-initial public offerings (IPOs), like Facebook’s in 2012.
Sadler said: “If you look at the investors who make most of the money in these mega-IPOs, it’s the venture capitalists and private equity funds who got in before the company went public. Their basis price for Facebook was around 38 cents. Facebook’s IPO price was $38, and today it’s around $73.”
“Those early investors made some serious money. The average investor didn’t have the opportunity,” Sadler said. “With Reg A+, we believe they will.”
More information on what Regulation A+ means to you is available by downloading this whitepaper.
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Allegiancy is changing the business of asset management for commercial real estate owners and investors. With an advanced technology platform and singular focus on serving as the owners’ advocate, the company brings fresh vigor to an often poorly understood business. Combining its proactive Value Assurance? operational rigor with an intense focus on cash flow and profitability, Allegiancy is expanding on a track record of more than four decades of success.
Headquartered in Richmond, Va., and led by a team of seasoned professionals and more than 100 years of experience, Allegiancy manages properties that have outperformed their peers by 45% since 2006. The company has more than $300 million in assets under management (AUM) and delivers clients attractive returns and profitable, hassle-free investments in commercial real estate.
More information about Allegiancy may be found at www.allegiancy.us.
To schedule an interview with Allegiancy’s leadership, contact Audrey Bevel at firstname.lastname@example.org or 866.842.7545 ext. 204.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements are based upon the Allegiancy, LLC’s (the “Company”) present expectations, but these statements are not guaranteed to occur. Furthermore, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. Investors should not place undue reliance upon forward-looking statements. For further discussion of the factors that could affect outcomes, please refer to the “Risk Factors” section of the offering circular dated January 14, 2014 and filed by the Company with the U.S. Securities and Exchange Commission on January 15, 2014. The offering circular, and any supplements or updates thereto, is available on the EDGAR system located on www.sec.gov.
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