Key Takeaways
- Fund structures use LP/GP with management fees (1-2%) and carried interest (20% above hurdle).
- Deal-by-deal provides more transparency; fund structure deploys capital more efficiently.
- Transition to fund structure typically at 10+ successful deal track record.
- Transparent quarterly reporting and investor communication drive repeat investment.
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Test Your Knowledge
1.What is the typical management fee in a distressed real estate fund?
2.What is carried interest in a fund structure?
3.At what track record level do operators typically transition from deal-by-deal to fund structure?