DSPLN Investments Reviews

Diversification: DSPLN investments often involve multiple properties, tenants, and asset classes across various locations, which helps reduce concentration risk and enhances portfolio diversification.

Passive Income: They can provide steady income streams through rental payments or distributions, appealing to investors seeking regular cash flow.

Potential Tax Benefits: DSPLN structures, often linked to 1031 exchanges, may offer tax deferral advantages by allowing investors to defer capital gains taxes when reinvesting proceeds into similar properties.

Professional Management: These investments are typically managed by experienced sponsors or companies, reducing the need for hands-on involvement by investors.

Access to Real Estate: DSPLN investments allow investors to participate in real estate markets without the complexities of direct property ownership.

Diversification through private investments: Incorporating private equity, private real estate, and other alternative assets into defined contribution (DC) plans enhances portfolio diversification beyond traditional public stocks and bonds. This can improve risk-adjusted returns and reduce overall portfolio volatility.

Enhanced retirement outcomes: A modest allocation to professionally managed private alternatives within a multi-asset DC portfolio (such as target date or balanced funds) can increase participants’ chances of achieving retirement adequacy by potentially delivering higher returns and smoother performance over time.

Access to institutional-quality assets: Private real estate investments provide direct ownership of income-producing commercial properties, offering stable income streams and inflation hedging, which are typically unavailable through public markets alone.

Blended strategies for liquidity and stability: Combining private and public real estate (e.g., 85% private real estate with 15% listed REITs) can reduce volatility and improve liquidity, addressing operational concerns within DC plans while maintaining strong portfolio outcomes.

Fiduciary guidance and regulatory compliance: Recent Department of Labor guidance clarifies that including private equity in DC plans is permissible under ERISA, provided fiduciaries prudently select and monitor these investments, ensuring they meet participants’ best interests.

Flexibility in investment design: DC plan sponsors have broad flexibility to tailor investment lineups to their participants’ unique needs, allowing inclusion of alternative assets as part of a diversified, participant-directed investment structure.

Liquidity Constraints: DSPLN investments are generally illiquid, meaning investors may face challenges or delays when trying to sell or access their capital.

Risk of Principal Loss: Like all real estate investments, there is a risk of losing principal due to market fluctuations, tenant defaults, or property devaluation.

Fees and Expenses: These investments may involve various fees, including management fees, administrative costs, and potential surrender charges, which can reduce overall returns.

Limited Control: Investors typically have little to no control over property management decisions or operational aspects.

Concentration Risk if Not Diversified: Overconcentration in a single DSPLN sponsor, property type, or geographic area can increase risk, so diversification among multiple offerings is advised.