Downside Protection for LPs
Looking for ways to structure a deal where the LP is focused on protecting their downside. Say, for example, in a JV development deal. Common ones I can think of are:
- Structuring an LP investment as preferred equity, so they always get paid back before common equity.
- LP has a preferred return in a waterfall structure whereby they get paid back their equity invested plus some return on that equity (could be based on an IRR, Equity Multiple, etc.).
I feel like above are quite common, but what else is there?
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