Pascal W.
Level 5: Power ReviewerReviews by Pascal W.
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My First O&G Deal — Learned How I'd Do It Next
I invested $60,000 in LCP Chocwell 10A in November 2022. This is an oil & gas working interest deal managed by Le Creme Partners (Aram Sarkissian & Jeff Block). The fund drilled wells in Oklahoma, structured as a tax benefits play with significant upfront depreciation and monthly distributions from oil production. Before investing, I had multiple calls with both Aram and Jeff, reviewed the offering materials, and spoke with other LPs. The deal started drilling in late 2022, and we were officially producing oil by March 2023. The pitch was 10 wells. The first two didn't hit. To their credit, the team negotiated two additional wells, bringing the total to 12 — but not all wells are active yet, and overall production has been disappointing. After 3+ years, I've received approximately $6,547 in total distributions on a $60K investment — roughly 2.9% annualized cash return. That's poor. The tax benefits have partially offset the weak cash flow. I've taken roughly 90% depreciation over three years. But I also learned something important about oil & gas tax mechanics through this deal: you can only take the depreciation for wells that have been drilled and put in service. If the wells haven't been spudded yet, you're waiting. That's another reason I've shifted my thinking toward buying into portfolios of already-producing wells rather than greenfield drilling programs. On the sponsor: Le Creme Partners has been consistent with communication — monthly updates every single month since December 2022 without a miss. They use SponsorCloud/SyndicationPro for their investor portal and reporting. On that front, no complaints. Where I'm disappointed is execution. The well performance has been below projections, the timeline has dragged, and the overall return profile hasn't come close to justifying the risk of a drilling program. I'm not opposed to oil & gas as an asset class. But if I do it again, it needs to be structured very differently. I've since come across strategies where you buy into portfolios of already-producing wells, use the existing cash flow to fund new drilling, and have a clear exit strategy — either returning capital or rolling into a continuation fund. That approach de-risks the two biggest problems I experienced here: drilling risk (wells that don't hit) and timing risk (waiting for wells to come online before you see returns or tax benefits). I'd rather pay a slight premium for production that's already proven than bet on greenfield wells at a discount.
15% Haircut, 18 Months Gated — But I Learned
This is the deal that fundamentally changed how I evaluate private credit. I invested in the Pelorus Cannabis Fund in September 2023 — a private credit vehicle originating loans to cannabis operators with heavy construction lending exposure. Within five months, my annualized yield dropped from 10.92% to 4.55%. Shortly after, roughly 10 additional loans went delinquent. A targeted 12% return became roughly 2%, and my capital has been gated for over 18 months with no line of sight to redemption. On the sponsor: Pelorus has been professional and willing to engage. They get on the phone, they explain what's happening, they haven't gone dark. But here's what sticks with me — I had dinner with the team shortly before investing and spent real time building a relationship. Meanwhile, their portfolio was already showing stress I wasn't made aware of. I get it — they're raising capital and that's part of the business. But there's a difference between a sponsor who communicates well and a sponsor who is fully transparent, and that distinction matters. It doesn't make them bad people. It does make me evaluate sponsor transparency very differently now. The core issue was portfolio composition. Construction loans in cannabis are a different animal — federally illegal borrowers with limited banking access, collateral with minimal alternative-use value, and binary outcomes on mid-build projects. When borrowers stalled, delinquencies cascaded. Before this deal, I wasn't pulling loan tapes. I wasn't stress-testing delinquency scenarios. I didn't understand the structural difference between a bridge loan on a cash-flowing property and a construction loan on a project that could stall at 60% completion. Now I do. Every private credit fund I evaluate today gets scrutinized at the loan-level because of what I learned here. Lesson for other LPs: Pull the loan tape. Understand the delinquency rates. Ask what percentage of the book is in construction, what the average LTV looks like on those loans, and what happens to collateral value if a project stops mid-build. Lesson I had to learn the hard way but I became a significantly better investor because of it.
My First Dev Deal — Set the Benchmark
I invested in 1962 Market Street in October 2022 — a ground-up development in Denver syndicated through Denver Angels with Monfort Companies as the developer. The property is now fully built, well-stabilized, and we're expecting to exit within the next six months. This one looks like it's going to be a good outcome. What set this deal apart was how the operator ran the process. They installed video cameras on the construction site and gave investors direct access to the feed — I could watch the building go up in real time. On top of that, communication was consistent throughout: regular updates, photos, progress reports, and detailed financials. For an asset class that carries as much risk as ground-up construction, that level of transparency made a real difference in how I experienced the deal as an LP. This was my first development deal, and I didn't know what to expect going in. Since then, I've participated in several ground-up construction deals, and they are all over the place in terms of performance. Development carries layers of risk that stabilized acquisitions simply don't — construction risk, timeline risk, lease-up risk, permitting delays, cost overruns. You need to make sure you're being compensated for all of that. I'm glad this one turned out well. It opened my eyes to what a well-executed construction deal should look like and gave me a benchmark for evaluating every development deal that's come across my desk since.
ATM Fund Turned Ponzi — 62% Loss
I invested $104,000 in Prestige Fund D V, an ATM ownership fund managed by Prestige Funds Management. The fund purchased ATM hard assets, with Paramount Management Group (controlled by Daryl Heller) handling placement and operations. The projected returns were extraordinary: 24.7% cash-on-cash, $2,142/month per $104K tranche, with a 7-year term and a 4-year payback period. They also marketed significant depreciation benefits (100% bonus depreciation in Year 1). My diligence before investing was extensive. I spoke to the operator multiple times. I reviewed what were presented as audited financials. I had friends who had completed multiple site visits across states — they physically went to locations and verified ATMs were there. The fund had 10+ years of consistent monthly distributions with investors going full cycle. Major banks were underwriting them with hundreds of millions in loans. This wasn't some fly-by-night operation — it had all the hallmarks of legitimacy. Distributions stopped in April 2024. By July, legal counsel (Kelley Clarke PC) had served a formal Notice of Default on Paramount. What emerged was that Heller had been diverting Monthly Revenue Remittances, using investor-owned ATMs as collateral for debt obligations of other Heller entities. The situation escalated through litigation in Lancaster County, Pennsylvania. In November 2024, a $138 million judgment was entered against Paramount. As of this writing, the likelihood of Paramount completing an investor buyout has been described by counsel as "remote." I invested $104K. I received approximately $40K in distributions before things collapsed. The rest is gone. Here's what I wrestle with: what additional diligence could I have done? Even public companies like Enron had audited financials and turned out to be fraudulent. The ATM space itself is not fake — ATMs are real assets that generate real surcharge revenue. An operator simply turned into a bad actor. Site visits confirmed ATMs existed. Banks had underwritten them. Other LPs had gone full cycle. I don't think there's really much more diligence I could have done. I do think about it a lot, though. Losing money isn't great. Lesson for other LPs: Not every deal is going to work out. That's just the reality of passive investing. This is why you diversify — across operators, asset classes, and vintages. No amount of diligence eliminates the possibility of a loss. You size your positions so that when one doesn't go your way, it doesn't sink the ship.