From Country Clubs to Sovereign Wealth Funds

The country club model—where real estate sponsors raise money from rich friends via a syndicate—has been a tried-and-true way to fund projects for generations. But for sponsors of traditional real estate projects and OpCo-PropCo platforms looking to scale larger portfolios, access to larger pools of capital are needed beyond country club checkbooks.

As a sponsor grows and reaches larger–and more sophisticated–investors, different investing structures become necessary. This letter will dive into the most popular of those structures:

• Services agreements, a step toward—or alternative to—joint ventures;
• Joint ventures, scaling quickly with a single partner;
• Syndication, a deal by deal approach;
• Institutional funds, maximum scale and control;
• Separately managed account, a hybrid between a fund and a joint venture;
• Venture capital, a funding alternative for scalable OpCos;

By comparing and contrasting these models, this letter aims to equip sponsors and real estate entrepreneurs with the knowledge to select the most suitable path for growth and success.