Video: raising capital and real estate with a billionaire founder

The conversation covers raising capital and real estate. It is presented as a fireside chat with a billionaire founder.

What the conversation covers

A sponsor raising equity for an apartment deal usually works from a private placement memorandum and an operating agreement. Investors then compare the preferred return, often around 8 percent, against projected returns on a hold of 5 years. Lenders add their own tests, such as a debt service coverage ratio of 1.25 and a loan to value ceiling near 65 percent, which shape how much equity a sponsor must find and how the waterfall splits profit between the general partner and limited partners. Rates matter. Housing supply sets the rent roll.

Family offices often allocate between 5 and 15 percent of a portfolio to real estate, held through direct deals or co-investments beside a sponsor. Some also hold a small digital asset position, such as bitcoin, in a separate custody account. Each choice runs through an investment policy statement that sets concentration limits and reporting duties. Sponsors who understand that paperwork speak the language of the allocator.