Does anyone know of any real estate shops that are similar to prop trading shops in that they are only using their own money? No profit is leaving the fund other than to those working there?
Could see some benefits in this as you could make some pretty wild plays with nobody to report to outside of the company
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The most obvious example would be a family office.
I've also know shops where one guy puts up 75% of the equity and two others split the rest, the two minority guys run the office. I know of similar situations with varying percentages.
At the end of the day it all relies on one thing, an extremely wealthy individual.
Most people who aren't in the institutional space operate this way. Usually it is easier for everyone to have an GP/LP structure, but who you LP can make it so you report to basically no one.
Our company is structured as a family office. Most of our deals involve outside LPs, our own open ended funds, or our reit, but sometimes we do a deal with only the family money.
Eldridge / Cain, MSD, McCourt, Sightway Capital, one could make an arguement for CK Asset and other HK developers.
seconding SHB above. believe it or not there are groups under Sam Zell's umbrella that i think deploy only his own cash and he allows his people to promote off of HIS own equity.
What are these groups named?
If you don't count 3rd party debt (like bank loans), many investors operate this way. Further, many privately held RE companies will actually refinance their properties and use the proceeds to buy back all the LP equity interests they may have used in acquisition/development. It's actually very common.
The Irvine Company and Caruso.
A lot of commercial real estate is owned "direct" (may or may not have debt) by the name on the door. Large and small firms can work this way. May still be multiple partners or families, but its very common, especially with older and class B/C properties. In reality, there is probably much more real estate owned in this format than via intermediary institutions, but far less trading activity (selling can have massive tax implications) so just less visibility.
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