Concerned about your investment in CNL Strategic Capital LLC?
The White Law Group is investigating potential claims involving broker dealers who may have unsuitably recommended high-risk private placement investments like CNL Strategic Capital LLC to investors.
CNL Strategic Capital, a publicly registered, non-traded limited liability company, reportedly seeks to provide current income and long-term appreciation to investors by acquiring controlling equity stakes in combination with loan positions in durable and growing middle-market businesses, according to its website.
According to SEC filings, CNL Strategic Capital LLC, filed a form D to raise capital from investors in 2017. The securities offering is reportedly manufacturing and the total offering amount was purportedly $200,000,000.
According to the CNL Strategic Capital overview, an investment in CNL Strategic Capital, LLC is considered speculative and involves a high degree of risk, including the loss of all or a substantial amount of your investment. It is also an Illiquid investment, and if investors are able to sell their shares, they will likely receive less than their purchase price.
The company notes that distributions paid are not solely based upon performance and aren’t guaranteed in frequency or amount. Distributions will be paid from “net investment income, offering proceeds, borrowings or reimbursable expense support; the latter three will reduce future cash available for distributions and be dilutive to future shareholders.”
The problem with alternative investments such as CNL Strategic Capital LLC is that they often involve a high degree of risk. They are typically sold as unregistered securities which lack the same regulatory oversight as more traditional investment products like stocks or bonds. Lack of liquidity can also be a problem for investors.
Investments such as these are typically sold by brokerage firms in exchange for a large up-front commission. High fees can range from 7-10%, as well as additional “due diligence fees” that can range from 1-3%. In this particular offering, the Reg D indicates that the sales commissions and fee were estimated at up to 5.50% selling commission and up to 3% placement agent fee of the sale price for each Class A share.
For more information on Reg D private placement investments please see:
Filing a Complaint against your Brokerage Firm
Despite the risks of investing in alternative investments– such as a private placement investment– brokerage firms continue to push this type of product because of the high commissions associated with their sale and creation.
If a brokerage firm makes unsuitable investment recommendations or fails to adequately disclose the risks associated with an investment, they may be liable for investment losses through FINRA arbitration.
FINRA operates the largest securities dispute resolution forum in the United States, and has extensive experience in providing a fair, efficient and effective venue to handle a securities-related dispute.
Free Consultation with a Securities Attorney
If you have concerns regarding your investment in CNL Strategic Capital LLC or another Reg D private placement investment, The White Law Group may be able to help you. To speak with a securities attorney about your options, please call the office at 888-637-5510 for a free consultation.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Seattle, Washington.
For more information on The White Law Group and its representation of investors in FINRA arbitration claims, visit https://www.whitesecuritieslaw.com.
To learn more about the firm’s investigation of CNL private placement offerings please see: