By Austin DeNoce, Benzinga
Physicians, after years of intensive training and practice, are known for their rigorous and methodical approach when making decisions that impact their patients' health. This same attention to detail can often extend to their financial investments, and many are curious about where successful doctors invest their money. Treating patients, like investing, requires intelligence and patience.
Among the myriad of investment choices available, DLP Capital emerges as an interesting choice due to its comparable ethos reflected in its broader vision of positively impacting society, and doctors seem to have taken notice the company reports doctors have invested over $260 million in DLP Capitals housing-focused funds.
A Glimpse Into DLP Capital's Portfolio
Since it was founded in 2006, DLP Capital has solidified its position in the investment landscape, earning a spot on the Inc. 5000 Fastest-Growing Companies list and retaining it for 11 consecutive years. The firm manages assets valued at over $5 billion, drawing support from a diverse pool of more than 2,600 investors. Owning and overseeing over 18,000 housing units, several of their funds have met or even surpassed their targeted returns. Through their varied endeavors, DLP Capital claims to have positively impacted more than 838,000 lives.
Historical Returns: A Snapshot
DLP Lending Fund: With a target annual return of 9-10%, this fund managed a 12.71% annual return as of September 30, 2023. As a private REIT emphasizing rental housing in high ownership-cost areas, it offers investors liquidity, a rigorous borrower vetting process and a 90-day redemption period without long-term constraints. Prioritizing investor returns, all preferred payouts are dispensed before any management fees, and invested capital retains a top-tier position, ensuring payment precedence over common equity participants.
DLP Building Communities Fund: With an ambitious target of 11-13%, this fund achieved an annual return of 12.81% by the end of 2022. Designed as an evergreen private real estate fund, it focuses on developing new rental communities for attainable housing while providing a measure of protection against stock market volatility, consistent asset valuation for growth and flexible redemption options. All returns are prioritized to investors before any management fee is levied, ensuring their capital retains a preferred, high-priority position in all deals.
DLP Preferred Credit Fund: This fund achieved a return of 10.52% in Q2 for 2023 on its 10-11% annual target, emphasizing insulation against rising interest rates and ensuring liquidity. By rigorously vetting borrowers and prioritizing loans to seasoned real estate sponsors, the fund ensures investors enjoy a preferred payment position and monthly returns before management fees, aligning the interests of DLP with its investors. Focusing on debt and preferred credit investments in the Sun Belt, its intent is to make a dent in America's affordable housing crisis, ensuring that rentals are attainable for working families.
DLP Housing Fund: Perhaps the most eye-catching of the lot, DLP reports this fund saw an annual return of 27.04% by September 30, 2023, much higher than its annual target of 10-11%. By investing equity in multifamily rental communities (including manufactured housing and RV), the fund emphasizes both renter affordability and investor returns. The fund operates as an open-ended, private real estate venture focusing on long-term assets to yield enhanced returns. Investors not only benefit from tax advantages like depreciation offsets and 1031 tax-deferred exchanges, but they also enjoy flexible annual redemptions and a preferred position, guaranteeing payment priority over common equity investors.
With returns like this, DLP may seem like a natural choice for many, but doctors are being attracted to DLP Capital for multiple reasons.
The Attraction Of Passive Income
One of the primary draws for busy professionals such as those in the medical field is the concept of passive income. They can enjoy the fruits of their investments without the daily demands of active engagement. DLP Capital's offerings, especially with its history of consistent returns, specifically aim to satisfy this demand for passive income and doctors seem to find them particularly appealing.
Impact Investing: Partnering With Doctors To Do Good
Professionals like doctors frequently align their investment choices with societal benefits. Given the intrinsic desire among many in the medical profession to contribute positively to society, there's potential interest in DLP Capital, primarily due to its initiatives in affordable housing.
Specifically, the DLP Housing Fund focuses on rental housing aimed at those with incomes near the area median. Likewise, the DLP Preferred Credit Fund and the DLP Building Communities Fund incorporate rental affordability into their strategies. Consequently, these funds combine financial objectives with addressing a relevant societal challenge.
DLP Capital has maintained a consistent investment record. Since its founding in 2006, there have been no reported capital losses for investors. Such reliable performance, alongside the size of potential returns, are important considerations for those evaluating investment options.
Some of DLP Capital's funds have also achieved returns beyond their initial targets, reflecting reasonable success for some of its investment strategies. At the very least, their performance suggests a capacity to meet and occasionally exceed market expectations, though past performance is not a guarantee of future performance.
Don Wenner, the CEO of DLP Capital, has played a significant role in the firm's direction. With over 16,000 real estate transactions amounting to more than $4 billion since 2006, his experience is extensive. Leveraging his experience, DLP's overarching mission includes both profit generation and broader goals to positively influence millions of lives.
DLP Capital's Prognosis
DLP Capital has positioned itself within the investment space by emphasizing passive income, societal impact and consistent returns and successful professionals like doctors seem to be paying attention, with over a quarter of a billion invested by the medical community. The firm offers a comprehensive approach that integrates passive revenue streams, initiatives in affordable housing and a track record that reflects its strategy and performance over time. All returns aside, DLP Capital's alignment with affordable housing initiatives echoes the ethos of many in the medical profession and could be attractive to others, especially those seeking to yield a positive societal impact through their investments.
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