Blog 2: Week 1

While my first week of senior project was littered with AP test taking and studying, I was able to do some background research prior to my starting at MAI this Monday. I was told that I would be spending the majority of my time in the alternative investments department, so my research began with answering the question, what exactly are alternative investments? I had a basic understanding in the sense that it refers to investments outside the traditional stocks and bonds, but was able to refine this definition through research and come to the conclusion that it is largely made up of investments in private equity, venture capital, commodities, and real estate. I then looked into various examples of each and began to understand more fully the field of alternative investments.

Upon arriving at MAI on Monday, I immediately put this knowledge to use as I sat in on a meeting in which the firm was considering investing capital into a private real estate project. In making the decision if to invest in the project, those in the meeting weighed to pros and cons of the specifics of the project, which in this case was a large warehouse which the capital seekers sought to turn into a multi-use office building, the amount of capital needed, and the specific expected return on their investment or ROI. The investors at MAI, however, thought that the project was too risky, as the warehouse was located in a non-desirable area for an office building and that the profit projections were off as they did not account for it.