Hey all,
Looking to gather a list of firms that specifically raise and place capital in the co-gp space. REPE focused, rather than owner, operator, developer.
I know Wells Fargo has a small division that does this. AECOM Capital follows this structure. Feel free to drop any names that come to mind. Thanks!
| +48 | Anyone else being pushed to underwrite more aggressively (Multifamily)? | 14 | 4d |
| +30 | Uncertain of what To Do Next | 5 | 1d |
| +29 | What should we be buying? | 22 | 2h |
| +28 | Capital Restricted Developer | 2 | 1d |
| +27 | Basis play / value-add office in high-growth markets - value trap or generational buy? | 10 | 3d |
| +22 | Warning: J. Shaw Recruiters | 5 | 1d |
| +18 | Due Diligence - ALTA Survey | 3 | 2d |
| +17 | Laughable Job Posting | 3 | 17h |
| +15 | Seeking Advice: How Do You Get Value from ULI Membership? | 2 | 4d |
| +11 | PGIM Real Estate Equity vs. Private Credit | 3 | 4d |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
I believe the Bascom Group has enabled two offshoots : Milestone and Harbor
Always been a bit curious as to how those co-GP groups scale or make any real money. Seems like the type of operators looking for co-GP are either capital constrained or not Tier 1 types, so assuming the risk profile is a bit greater ?
Curious as well. I assume the more mature co-GP participates similar to a pref equity partner but has some level of control & requires a higher yield due to them likely signing the carve out guaranty.
I’ve noticed there has been a whale of a shop out in the west coast gobbling up multifamily at a pace that, on paper, does not really add up when you look at their leadership team. I’m assuming that behind the curtain is a big muscle co-GP that lets them get all the press but is signing the checks at the end of the day. Capital structure is a super interesting area of this business.
Exactly, it’s been super interesting to see. Would love to know more about these shops and who the big players in this space are . Talked to a guy who said their average realized IRR since founding the firm has been above 40%.
Which west coast group are you referring to?
My guess is Tides Equities
You would be correct.
Everyones guess lol
Anyone have specific companies or groups they know of in this space ? Please drop below! Thanks!
What team at Wells Fargo does this?
Aside from when they owned Eastdil, I was not aware they did anything in the equity space.
RanchHarbor
The only time I have seen a Co-GP relationship is for a development firm where they build garden-style multifamily on the outskirts of towns in the midwest. (really a bunch of sfrs and a tiny gym). I take it as the projects are either unsavory to LP investors or you just have a group of developers that want to spread out their equity.
Pearlmark
Silverpeak (bunch of former Lehman guys). Definitely a sharp team and they had pretty blockbuster economics on the two deals I worked on them with.
Co-GP is a really interesting space. Lots of people asking how it scales - think of it this way - there are two parties - Sponsor GP and Co-GP.
Similar to a GP / LP relationship, Sponsor GP puts up 5% of the capital and Co-GP puts up 95%. There is a predetermined split of the fees (property management, asset management, acquisition, etc.). Additionally, there is a waterfall structure on the cash flows (just like with a traditional GP/LP. This works out well (assuming returns are hit) as the Sponsor GP put up minimal cash but is paid is sweat equity. The Co-GP puts up the majority of the cash, but also gets paid via the promote of each individual deal plus fees. Both the GP and Co-GP can get outsized returns because they are still bringing in a traditional LP to each deal. Assuming returns are hit, the Sponsor GP gets ‘extremely outsized’ returns, the Co-GP gets ‘outsized’ returns and the LP gets their ‘general’ returns.
The strength of being the Co-GP is access to the ‘outsized’ returns and promote without having to do the work. I’ve seen Co-GP ventures where $100,000,000 gets put to work on a 95/5 basis, and if the returns are hit, everyone is happy post promote providing outsides returns.
Interesting. What value does the Co-GP bring to the table apart from cash? If the only value that the Co-GP brings to the table is cash, why would the sponsor rather have a Co-GP than reduce their GP Equity requirement and increase their LP equity requirement (1% GP - 99% LP instead of 10% GP - 90% LP for example)?
Usually cash. For starters, it’s always easier to have more cash than less. You get more deals done for the same amount of cash which means higher fees. The GP Sponsor may not have enough cash to do $100 MM of GP cash outlays. Also, no LP will do a deal where the GP puts 1% and the LP puts 99%. It’s usually 95%/5%. Though on rare occasions I’ve seen 97.5%/2.5%.
Having the co-GP fund means doing more deals which means more fees and more money.
I've seen Co-GP deals where the Co-GP flexes their balance sheet for better debt terms/non-recourse.
The main reasons developers want a co-gp are to help fund the GP portion of equity and, maybe even more importantly, to provide the guarantys.
Pearlmark is in that space
Other reason sponsors want co-GP partner that hasn't been mentioned is often due to co-GP's greater ability to raise LP capital/get good debt terms and/or handle asset management.
Clairmont Capital
Molestiae quos rerum ut vel non porro. Dolores aperiam nesciunt ipsa repellendus est. Totam provident eum impedit. Consequatur fugiat incidunt accusamus nostrum eos quo sit. Doloremque quas voluptate optio. Qui fugiat voluptates optio id.
Vero possimus consequatur et qui sunt sunt. Ex corporis magnam aut. Molestiae saepe suscipit culpa facilis maiores impedit esse. Itaque quos asperiores aut dignissimos sunt esse. Consequatur quis est sed ut corporis natus consequatur. Suscipit voluptatem modi velit cumque quasi reprehenderit id neque. Consequatur est aperiam repudiandae iure non quae est.
Quia totam voluptatem sed quis hic voluptas in provident. Eos itaque tempore qui culpa. Vel exercitationem sed vel est perferendis et. Et qui harum voluptatem mollitia voluptate.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
Numquam quidem ut odit aperiam. Voluptatibus libero modi quia neque aut et tenetur aut. Et ut delectus quo quia ex.
Asperiores non quia temporibus ratione assumenda molestiae. Et explicabo ut autem omnis nostrum. Aut maxime neque in porro.
Voluptatum praesentium pariatur suscipit necessitatibus dignissimos reprehenderit iure. Sit rerum rerum non aut eum debitis soluta odio. Ad error non qui sint. Tenetur aut occaecati sit ducimus ea placeat eum. Quod quibusdam voluptatem aut vero ut assumenda inventore modi. Est consectetur sapiente provident aliquam minus reiciendis molestiae voluptate.
Omnis sed quia voluptatibus et magni earum. Praesentium ipsam id ab est explicabo. Blanditiis exercitationem iste at saepe reprehenderit. Dolor doloribus magni dolorem. Aliquid debitis et voluptatem quas molestias aliquam.