Investing on behalf of HNWs - what kind of deal structure is typical?
I may have a future opportunity to work with a HNW to invest in the future and am trying to educate myself on what kind of investment/comp structures are seen as typical or market.
I work in the debt space and have seen several of our borrowers backed by HNWs that employ a waterfall through a fund structure or a typical GP/LP split on a deal-by-deal basis, with a variety of fees (acquisition, AUM, development, etc.) which keep the lights on, which I imagine is typical, but I'm wondering what other less common/more esoteric structures there are out there. Any thoughts are appreciated.
HNWs could also act as a mezz or pref equity lender. LP is definitely the most common though, and as an LP they would be the ones receiving fees, so keeping the lights on would only refer to the GP.
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