From Country Clubs to Sovereign Wealth Funds

Comparing six models to fund equity for real estate projects and platforms

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.