Risks & Regulations
All investments have associated risks which investors should be aware of. An integral risk management strategy is to diversify – as the old saying goes, “don’t put all your eggs in one basket.” At Raintree, we believe it is extremely important that investors have a firm understanding of the risks associated with their investments.
Investing in private securities can display many of the same key risks, including:
• Reporting standards are lesser for private companies
• A prospectus is not prepared and a securities regulator does not review an Offering Memorandum prior to its distribution
• The business and management teams are generally new and/or small
• There may be no market to trade your securities
• There are generally lesser governance standards
Additionally, each investment may have very specific business and market risks inherent in it because not all investments display the same underlying risks. Every investor relying on the Offering Memorandum exemption will receive an Offering Memorandum that outlines the risks of the specific investment. Raintree selects investments on a wide spectrum of risk and we do so expecting that the returns will be commensurate with the risk, thus providing investors with a variety of options. The managers we work with are expected to be able to manage or mitigate risk effectively; nevertheless, risk is inherent in investing.
Our Private Wealth Advisors are trained to assist investors in identifying the key risk of an investment and assessing the suitability of the investment in relation to a client’s ability to accept risk and their risk appetite. We take this process very seriously. If you have questions about the risks of investing in alternative investments or would like to know how your portfolio would benefit from investing, please speak with one of our Private Wealth Advisors.