EFTA01036833.pdf

From: Richard Kahn To: "Jeffrey E." <jeevacation@gmail.com> Subject: Fwd: REIT Operating Units Date: Tue, 22 Aug 2017 19:34:47 +0000 is this for you? client? paul used HBRK name which triggered response below please advise on entity name to give brace if you would like us to receive more info on S&P overlay strategies thank you Richard Kahn Begin forwarded message: From: Jaeger, Bruce <MMa Subject: RE: REIT Operating Units Date: August 22, 2017 at 3:22:11 PM EDT To: Paul Barrett Cc: Richard Kahn < Is HBRK Associates located at 1365 York avenue? If so then, probably not. If not a direct client or affiliated entity of Jeffrey's then difficult to seek approvals. The client/counterparty would require significant disclosure including but not limited to AUM, my history and relationship with that entity, the level of sophistication and other particulars that Stifel/Fund may require. What entity or b/d does Jeffrey currently trade with? From: Paul Barrett [mailto: Sent: Tuesday, August 22, 2017 2:50 PM To: Jaeger, Bruce (New York 3 Bryant) Cc: Richard Kahn Subject: RE: REIT Operating Units Bruce Can we use HBRK Associates. Thanks Paul EFTA01036833 From: Jaeger Bruce Sent: Tuesday, August 22, 2017 12:25 PM To: Paul Barrett• Jeffrey E. Cc: Richard Kahn Subject: RE: REIT Operating Units See my initial responses next to your questions below- please let me know how you wish to proceed. Thank you. From: Jaeger, Bruce (New York 3 Bryant) Sent: Tuesday, August 22, 2017 9:54 AM To: 'Paul Barrett'; jeffrey E. Cc: Richard Kahn Subject: RE: REIT Operating Units Paul, The presentation by Sagewood Asset Management provides detailed responses to your questions below. Compliance requires that I provide the counterparty name and details so that they can send the materials directly to the prospective investor. Please forward and I will submit in the Stifel system for approval. After speaking with Jeffrey, exposures, margin requirements and potential capital calls were key concern(s) as well as fees and transaction costs. The Separate account structure allows for full transparency and the exchange traded short term SPX index options are liquid typically with next day cash settlement. SPX index options are taxed at a blended rate under IRS Section 1256 (60% LT, 40% ST Capital Gains). The targeted incremental yield utilizes existing portfolio as collateral. Based on the composition of the underlying portfolio, a certain release will be calculated and subject to margin requirements. Please let me know how you wish to proceed. From: Paul Barrett [mailto: Sent: Monday, August 21, 2017 10:42 PM To: jeffrey E.; Jaeger, Bruce (New York 3 Bryant) Cc: Richard Kahn Subject: RE: REIT Operating Units Hi Bruce Can you provide some more information on: • option maturities and strikes (in %) — there's variation here, the team doesn't use fixed strike / maturities • Is it only on SPYs or on SPX? Only SPX • How you expect the strategy to perform in today's vol environment vs the previous 5 years (Track record should help) • Any performance history (yes — contained in their Deck) • Fees including execution costs (contained in their Deck) Thanks Paul EFTA01036834 From: Jeffrey E Sent: Monday, August 21, 2017 1:50 PM To: Jaeger Bruce; Paul Barrett Subject: Re: REIT Operating Units more details? On Mon, Aug 21, 2017 at 1:41 PM, Jaeger, Bruce > wrote: In the interim, any interest in an overlay strategy for yield enhancement? Short term vol strategy using S&P options leveraging existing investment portfolio as collateral. Let me know From: Jeffrey E. [mailto:jeevacation©gmail.corn] Sent: Monday, August 21, 2017 12:50 PM To: Jaeger, Bruce (New York 3 Bryant) Subject: Re: REIT Operating Units hes on vacation. i asked on friday On Mon, Aug 21, 2017 at 12:47 PM, Jaeger, Bruce > wrote: Let me know how you wish to proceed. Thank you. From: Jaeger, Bruce (New York 3 Bryant) Sent: Friday, August 18, 2017 4:35 PM To: 'Jeffrey E.' Subject: RE: REIT Operating Units Jeffrey- As discussed, please call me on Monday once you determine that the client is comfortable with disclosing their REIT holdings. In addition to the potential loan against the REIT operating units, if the underlying REIT is liquid and the GP is a willing party, contributing the operating units to an exchange fund may be an interesting way to diversify without triggering a taxable event. In the event the exchange fund accepts the operating units, a loan against more liquid collateral may be more beneficial for your client. Once we get clearance we can explore both options. Thank you Have a nice week end. Bruce Bruce W. Jaeger Director/Investments I STIFEL 3 Bryant Park 13'd Floor I New York, NY 10036 From: Jeffrey E. [mailto:jeevacation©gmail.corn] Sent: Tuesday, August 08, 2017 4:14 PM To: Jaeger, Bruce (New York 3 Bryant) Subject: Re: REIT Operating Units i assume there is tax risk if they have to exchange for shares or cash. . the holder will geta capital gain? EFTA01036835 On Tue, Aug 8, 2017 at 2:51PM, Jaeger, Bruce < > wrote: For Information & Discussion Purposes Only Stifel Bank & Trust has issued non-purpose loan(s) using Convertible REIT Operating Units as collateral. The Client, Bank and REIT were subject to a Tri-party collateral agreement. In the event of a default, Stifel Bank could "put" the operating units back to the GP and the REIT, at their discretion within a reasonable period of time, would redeem the units for either cash or freely tradeable securities. This loan structure required a "user friendly GP" that was willing to accommodate their significant shareholder. The Bank cannot accept more than 9.5% of the company shares to limit the affiliate issue in the event of a default. To hedge the loan and potential collateral call(s), the client could enter into a proxy hedge subject to correlation and disclosure risk. The nature of the facility can be in the form of either a demand loan or committed facility with fees to be negotiated separately for each structure. The size and LTV are dependent upon the Bank's appetite for risk, counterparty, internal concentration limits, assets held at the firm as well as other applicable criteria. It is helpful to know the exact restriction(s) on the units and if they are in certificated or book entry form. Another possible solution would be to have the client contribute the operating units to an Exchange Fund and then post the exchange fund units as Collateral for the loan. This is subject to another set of criteria which uses the diversified exchange fund units as collateral for a loan. We are not sure if the Exchange Fund would accept "operating" units but, for tax efficiency, the units would need to be contributed to the fund and then converted into shares by the fund subject to regulatory requirements. Happy to do more work but, I would need to know the particulars of the shareholder and their holdings. Let me know how you wish to proceed. Best regards- Bruce From: jeffrey E. [mailto:jeeyacation(algmail.com) Sent: Tuesday, August 08, 2017 9:43 AM To: Jaeger, Bruce (New York 3 Bryant) Subject: Re: REIT Operating Units tell me the structure ? On Tue, Aug 8, 2017 at 9:39 AM, Jaeger, Bruce < > wrote: Jeffrey, Good catching up this am. I did a little due diligence and we DO structure loan facilities against REIT Operating Units out of our Stifel Bank & Trust. Let me know how you wish to proceed. Best regards, Bruce Bruce W. Jaeger Director/Investments I STIFEL E-ma : 3 Bryant Park 13`U Floor I New York, NY 10036 EFTA01036836 This message, and any of its attachments, is for the intended recipient(s) only, and it may contain information that is privileged, confidential, and/or proprietary and subject to important terms and conditions available at If you are not the intended recipient, please delete this message and immediately notify the sender. No confidentiality, privilege, or property rights are waived or lost by any errors in transmission. please note The information contained in this communication is confidential, may be attorney-client privileged, may constitute inside information, and is intended only for the use of the addressee. It is the property of JEE Unauthorized use, disclosure or copying of this communication or any part thereof is strictly prohibited and may be unlawful. If you have received this communication in error, please notify us immediately by return e-mail or by e-mail to jeevacation@gmail.com and destroy this communication and all copies thereof, including all attachments. copyright -all rights reserved please note The information contained in this communication is confidential, may be attorney-client privileged, may constitute inside information, and is intended only for the use of the addressee. It is the property of JEE Unauthorized use, disclosure or copying of this communication or any part thereof is strictly prohibited and may be unlawful. If you have received this communication in error, please notify us immediately by return e-mail or by e-mail to jeevacation@gmail.com. and destroy this communication and all copies thereof, including all attachments. copyright -all rights reserved please note The information contained in this communication is confidential, may be attorney-client privileged, may constitute inside information, and is intended only for the use of the addressee. It is the property of JEE Unauthorized use, disclosure or copying of this communication or any part thereof is strictly prohibited and may be unlawful. If you have received this communication in error, please notify us immediately by EFTA01036837  return e-mail or by e-mail to jeevacation@gmail.com and destroy this communication and all copies thereof, including all attachments. copyright -all rights reserved please note The information contained in this communication is confidential, may be attorney-client privileged, may constitute inside information, and is intended only for the use of the addressee. It is the property of lEE Unauthorized use, disclosure or copying of this communication or any part thereof is strictly prohibited and may be unlawful. If you have received this communication in error, please notify us immediately by return e-mail or by e-mail to jeevacation@gmail.com. and destroy this communication and all copies thereof, including all attachments. copyright -all rights reserved EFTA01036838