What are some of the most prominent or successful REPE firms that invest specifically as a co-GP?
The only one I know of is AECOM Capital.
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I used to work at an boutique REIB shop before the 08 crisis (that shop folded pretty quick back then, it's a detail related to the next point)....
Yes, some REPE and even HFs did co-GP investment back then, we worked with one that raised a dedicated fund for that purpose. The strategy didn't go so well through the GFC, they got their ass kicked. Mainly because the developer/owners that needed co-GP capital were the weakest and often with the most risky, overleveraged deals. Since then I've not seen it return as major strategy, but I'm not in the business to work on such deals anymore either.
I have seen major developers/owner-operators do co-GP deals with smaller, regional/local developers/owners on case by case basis. The reason is generally to get access to the deal. But they do intend to truly be part of active management. The firm I work for has done this and would do so in the future, but really, we prefer to just buy outright rather than partner.
AECOM Capital is more like the co-developer model that just an equity investment at the GP-level. Generally, these structures are very different from LP structures. I've heard of Silverstein, RXR , Related, and Tishman (yes, I'm NYC based) doing deals that were probably structured as co-GP, but they are just called 'Joint Ventures'. Many, but not all, JV deals are essentially co-GP type deals, but legal structure my vary.
Thanks for the info.
To clarify, I’m primarily looking for firms with a strategy very similar to that of AECOM capital. They are organized like a PE firm and do not have a development team. They vet developers to partner with, and they are able to step in with their own project managers if things aren’t going smoothly. But I believe they analyze potential investments as a typical LP would and are otherwise not involved in day to day of SD, DD, CD, getting entitlements and permits, etc. So they are not necessarily a co-developer and are a pretty unique firm.
I think AECOM Capital is somewhat unique by right of being part of AECOM, my impression is that are more hands-on than a PE shop, but such service comes from other parts of the AECOM franchise. I know other construction/engineering firms do development, but not sure I know others that have platform quite like AECOM Capital, curious if you find any.
There are investors who still do co-GP deals, just seems like more case by case from what I've observed vs. a dedicated platform or fund.
My firm looks at co-gp deals. The crux of why you need a co-gp is because you either don't have stellar credit, don't have a balance sheet or maybe you have CRE experience but it's the first time going out on your own. In exchange for a PG or getting conventional financing vs bridge/hard money(4% vs 10%), they get access to your deal and they get admin fees, but everything else is negotiable. However we let the go-gp run the show but we get control rights. Makes sense if you have the most capital to lose and are on the hook for the loan.
Shervin - I DM'd you but in case your notifications are off please DM me. I am looking for a co-GP investor as well.
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