A “fair” deal would help.

According to a survey of institutional investors in private real estate funds by Preqin and Cadence Capital Group, LLC, institutional investor’s (we really suspect all investors) perceived “economic / market volatility” as the key issue affecting their investment. Seems reasonable as without strong fundamentals underpinning the investment thesis, uncontrolled or planned for economic / market volatility will mute the chances for economic profit.

What else worries investors? The following is a listing of the 10 key issues reported in the survey:

  1. Economic / Market Volatility
  2. Illiquidity 
  3. Valuations 
  4. Alignment of Interests
  5. Leverage / Debt Financing
  6. Transparency
  7. Fees, Terms, and Conditions
  8. Fund Performance and Returns
  9. Strategy-to-Market Fit
  10. Regulations

What do you do with this information? Make sure your transaction structure takes these “perceptions” into account; this listing provides a framework for structuring and operating in a way attractive to investors.