WASHINGTON, DC—Fundrise CEO Ben Miller has been placating frustrated investors that have found themselves shut out of first the company's various crowdsourcing projects and more recently its eREIT.
He tried again in his annual letter to investors.
Unfortunately, the explanation may have just served to frustrate would be investors a bit more as Fundrise also announced its investment results for 2015. Across all of its investments, it posted a weighted average return of 13.1%. That compares to the 1.37% the S&P 500 returned during the same time period.
To the investors, Miller wrote:
Given our belief that the US commercial real estate market is late in the economic cycle…we will continue to be extremely cautious, even if it creates the unfortunate side effect of some frustration from investors due to the scarcity of opportunities on the platform.
A great model for this is Jeremy Grantham of Grantham, Mayo, & van Otterloo (GMO), who from 1999 to 2001 saw investors redeem vast sums of money they'd invested with his fund because he would not invest in the hot tech sector. He had the discipline not to deploy his investors' capital even if it meant they would invest it elsewhere. Jeremy was right and the investors who stayed with him saved a lot of money when the dot-com bubble burst.
That said, he concluded that the company is confident that there will continue to be opportunities for quality investments in 2016.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
