Real estate capital raising and syndication
Multi-Family Office Mandate: Real Estate Lending and Fees
New York City $1B+ Multi-Family Office Investor Mandate Interview on Private Equity, Real Estate
Real estate sponsors, private lenders and fund managers who want to understand how a multi-family office serving foreign families picks partners and thinks about fees.
Quotes from the session
"For the families that invest with us, the US has always been an alternative destination for that cash."
"We have sometimes paid fees that we regret, and we have sometimes paid fees that we were very happy to pay."
"If we pay them well, they'll come back to us as a priority. If you start crushing them too much on fees, you'll be left at the end of the line for the good deals."
The short version
Damien runs a New York multi-family office whose investors are all non-US families, mainly from Europe and Latin America. The firm has two sides. A liquid portfolio of managers and funds, and an illiquid alternatives business. Since 2014, most of the illiquid work has been in US real estate, with a focus on lending.
In this mandate interview with Richard C. Wilson, Damien explains why the firm chose balance sheet lenders with no use and reports no defaults. He says the firm is now watching distressed real estate equity, is not active in private equity or venture capital, and treats fees as part of a long relationship.
From the source
- The firm's legacy liquid portfolio business has existed since inception in 96.
- Since 2014, most of the firm's illiquid alternative investing has been in real estate.
- The lenders the firm partnered with were balance sheet lenders using no leverage, and the firm reports no defaults.
Sources
From Richard C. Wilson's Centimillionaire Strategies YouTube channel: New York City $1B+ Multi-Family Office Investor Mandate Interview on Private Equity, Real Estate. Quotes come from the video captions, lightly edited for readability. Figures are the speakers' own estimates and experience.
General education only. Not legal, tax or investment advice.
Talk to a securities attorney to explore options around foreign investor taxation, lending fund structures and cross-border investor rules. Do not use AI to write your own legal agreements.
Five points worth keeping
- Foreign families want US stability. Damien says the families already hold local currency and local business exposure. The US gives them a market with stability and less volatility. The firm is focused entirely on the US today.
- Real estate lending since 2014. Most of the firm's illiquid work since 2014 has been real estate. Damien describes lending as a way to hold real estate exposure at a discount to the underlying asset value.
- Balance sheet lenders, no leverage. The firm does not underwrite loans itself. It looks for good lenders to partner with. Damien says the ones it chose were balance sheet lenders using no leverage, and the firm has had no defaults.
- Watching distressed equity deals. The firm is starting to look at distressed and semi distressed real estate equity. Damien says it is not rushing in. It is checking which investors have cash and building a pool of assets to invest in together.
- Pay fair fees, keep access. Damien says the firm has paid fees it regretted and fees it was glad to pay. It analyzes each deal inside a fund. He believes paying managers well keeps the firm near the front of the line for good deals.
Related questions
- What is a joint venture equity partner in real estate?A joint venture equity partner in real estate is a partner who puts up equity capital for a project while another party, the sponsor, finds the deal and runs it.
- What do 1031 exchange investors look for in a syndication?1031 exchange investors look for a deal they can understand quickly, a structure that fits their exchange deadlines, and a sponsor who clearly knows how exchanges work.
- What is the typical GP LP split in multifamily syndication?There is no single standard, but a common pattern is a preferred return to the investor first, often around 8%, then a split of the back end profit.
Questions about this video
Who are the investors behind this multi-family office?
All of the investors are non-US families, mainly from Europe and Latin America. The office is based in New York.
What is the firm not investing in right now?
Damien says the firm is not doing anything in private equity or venture capital. He sees no visibility or clarity there yet and says it is not a priority.
How does the firm think about fees?
Damien says some fees were regretted and some were gladly paid. The firm analyzes the deals inside funds. He believes paying managers well keeps the firm in line for good deals.
Put this into practice with the ready to raise checklist. See all real estate capital raising and syndication resources.
