$50M is very small. I’d say anything over $400M if equity is decently sized. That’ll lever up to $1BN at 60% LTV, and if you get a couple funds that size in series, at various points of the fund life cycle, then you can see a decent AUM. Anything smaller than $100M and it becomes difficult to justify the formation and admin costs.
Depends on what the purpose of the fund is. Trunk Yeti seems to be thinking of a large institution raising money. And in that case he's correct.
But if you are a smaller player who is hyper-focused on a single asset class in a single region, it can make sense to go smaller. Buying mid-size MF in Tennessee? $75mm can make sense, because you're not going to compete with big national players to write a $3-5mm checks. Someone running a $750mm fund can't afford to be writing a check that small.
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$50M is very small. I’d say anything over $400M if equity is decently sized. That’ll lever up to $1BN at 60% LTV, and if you get a couple funds that size in series, at various points of the fund life cycle, then you can see a decent AUM. Anything smaller than $100M and it becomes difficult to justify the formation and admin costs.
Depends on what the purpose of the fund is. Trunk Yeti seems to be thinking of a large institution raising money. And in that case he's correct.
But if you are a smaller player who is hyper-focused on a single asset class in a single region, it can make sense to go smaller. Buying mid-size MF in Tennessee? $75mm can make sense, because you're not going to compete with big national players to write a $3-5mm checks. Someone running a $750mm fund can't afford to be writing a check that small.
Does whether its a GP fund that can JV their equity with LPs vs being strictly an LP capital allocator change the answer to the question at all?
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Sed dignissimos et error ratione. Est odio ut totam libero quaerat qui. Molestiae sed qui laboriosam. Sit debitis suscipit odit numquam voluptatibus vitae. Eos molestiae sint rerum est fuga velit.
Aut rem velit at in iusto. Iste eligendi quaerat molestiae eum porro incidunt consectetur. Ut cumque unde ea et iusto inventore.
Ullam ut dolore maiores in maxime molestiae est. Itaque possimus sit sit nam et. Dolore et minus architecto ipsum dolore.
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