In our most recent webinar, Unlocking Growth: The Impact of Entity-Level Investing in Real Estate, the panel explored the potential and challenges around entity-level real estate investments.
Among other things, the group discussed:
Challenges in fundraising and capital formation
Many GPs are struggling with traditional deal-by-deal fundraising due to a challenging macro environment. Entity-level investing allows GPs to access new sources of capital by diversifying revenue streams and expanding product offerings. This capital provides much-needed flexibility, enabling firms to remain active even during periods of fewer exits or lower liquidity.
Increased interest from investors
Institutional investors are showing more interest in entity-level investments to capture platform growth, not just property-level returns. The panel also explored why LPs prefer firms with well-thought-out succession plans and the ability to scale operations through strategic use of invested capital.
The importance of clarity and alignment
Investors are selective, especially in entity-level deals that require a deeper commitment than property-level investments. GPs must clearly articulate what makes their business unique— expertise in a specific asset class, a proven track record, or the operational efficiency of their vertically integrated platform. This helps attract partners whose strategic objectives align with the GP’s vision, increasing the chances of a successful long-term partnership.