Navigating Risk and Reward in Alternatives Investing with Shawn Griffith

Nov 29, 2023

How can investors balance risk and reward when considering alternate assets like oil and gas?

 

This episode explores investing in oil and gas as an alternate asset class that can provide strong cash flow potential. We journey through the risks and rewards, getting insight into deal structures, due diligence considerations, and risk mitigation strategies.

 

Shawn Griffith is an experienced syndicator across multiple asset classes. While predominately focused on multifamily, he also covers oil & gas, self-storage, and ground-up development. His upcoming book merges his love of travel and real estate and helps investors to design their portfolios to support their travel habit. 

 

[00:00:00 - 00:02:00] Assessing Cashflow Potential and Market Cycles

• Oil and gas offers some of the best cash flow compared to other asset classes
• Pricing fluctuations impact operations and viability
• Companies employ inventory storage and timing strategies

 

[00:02:00 - 00:05:00] Deal Structures and Risk Mitigation

• Syndications, joint ventures, and funds each have different risk profiles
• The fund model spreads risk and offers downside protection
• Teams should have specialized expertise to understand all facets

 

[00:05:00- 00:10:00] The Art and Science of Exploration

• Past performance helps derisk but doesn't guarantee future results
• Precision exploration is complex with many variables
• Dry wells represent a significant financial loss

 

00:10:00 - 00:15:00 Aligning Goals and Risk Tolerance

• Investing thesis frames risk appetite and return requirements
• Market cycles impact operational decisions and viability
• Even experienced teams face stress in dealing with uncertainties

 

Quotes

 

"Just like any other investment, there's a lot of different moving parts. You don’t need to be an expert in all of them, but you do need to be aware of them." - Shawn Griffith

 

Connect with Shawn:

Website: https://twtmultifamily.com

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Connect with Lorren Capital, LLC. for syndicated multifamily investments, https://lorrencapital.com/.

To learn more about me, visit my LinkedIn profile, and connect with me.