Bob Fraser of Aspen Funds says investors worried about fraud should pick public companies, while those concerned about market risk should consider private REITs. Many larger private REIT sponsors get third-party CPA audits that catch irregularities and reduce Ponzi-scheme risk.
If you're concerned about fraud risk, public companies are definitely the way to go. If you're concerned about market risk, then private REITs are the way to go.
Though I would even say too on the fraud risk for private REITs is a lot of sponsors, and especially the larger sponsors, will receive audits from third-party CPA firms, right? Which catches a lot of that and can definitely add some comfort level to the fraud risk and it not being Ponzi scheme.
And this is accountants going in and really doing a deep dive and making sure that these numbers look right.
