1/ The brief story of real estate funds vs real estate syndications.
Syndication is a capital raise targeting a single RE deal.
Stragery with T&Cs is worked out at the start.
Once an exit is reached, we all go our separate ways or work on another syndication.
Syndication is a capital raise targeting a single RE deal.
Stragery with T&Cs is worked out at the start.
Once an exit is reached, we all go our separate ways or work on another syndication.
2/ This one is quite simple really.
If you get a chance to work with syndicators who have a fantastic track record in the industry, you are probably going to do very well.
They have to have skin in the game, therefore interest will be aligned.
If you get a chance to work with syndicators who have a fantastic track record in the industry, you are probably going to do very well.
They have to have skin in the game, therefore interest will be aligned.
3/ When they do well for themselves, they'll automatically do well for you.
Solid syndicators aren't in the business of losing money & their track record clearly shows.
However, if you partner up with an "inexperienced" syndicator, results might disappoint. Common sense right?
Solid syndicators aren't in the business of losing money & their track record clearly shows.
However, if you partner up with an "inexperienced" syndicator, results might disappoint. Common sense right?
4/ Real estate funds are closed vehicles, where you hand over your money with a lock-up period of 5, 7 or even 10 years to a few fancy degree-holding college kids who mastered the subject @ uni but without experience and skin in the game.
They run around looking for deals.
They run around looking for deals.
5/ While they find a few, they won't close many the right way.
Eventually, they start being worried about allocating remaining capital.
If they don't they won't be earning their fees.
Eventually, they start being worried about allocating remaining capital.
If they don't they won't be earning their fees.
6/ Since they are forced to deploy capital & perform, they end up NOT aligning their interest with those of their investors.
Some funds have a fantastic track record & are worth considering but for our family office, a deal per deal basis makes the only sense (syndications).
Some funds have a fantastic track record & are worth considering but for our family office, a deal per deal basis makes the only sense (syndications).
7/ Does this only apply to real estate?
No.
It's the same story in the hedge fund world and the mutual fund industry.
The goal is to raise money, earn fees & achieve a year-end bonus.
The majority of the time, no one gives (you know what) about the actual investor. 😂👍
No.
It's the same story in the hedge fund world and the mutual fund industry.
The goal is to raise money, earn fees & achieve a year-end bonus.
The majority of the time, no one gives (you know what) about the actual investor. 😂👍
