Quote from @Cheryl A.:
Quote from @Duke Giordano:
The nature of the limited partner and syndicator relationship is at best "holding information back" and at worst "deceptive or untruthful". This dynamic needs to change and hopefully difficult times like we are currently in will force limited partners to demands more transparency. Some of us in the industry are fighting to help with that for the limited partner, and hopefully that comes to fruition in the near future.
Agree, that is my why! My greatest pain point is not that the deals failed, although that certainly adds salt to the wounds, it's the poor communication, false narratives, chasing (almost begging) for updates, lack of full disclosure, the smoke and mirrors, etc. These are areas GPs can control and I guess choosing not to.
Also interesting in my situation when the deals began to fail the gps started distancing themselves from each other, which leads me to think the gps really had no or limited experience managing deals together. Lots of pointing fingers when things fall apart.
Question: during this 3 year run two of the gps have spun up and are now operating under new investment entities. Thoughts on why this might be? Is this a common trend?
On the flip side of all of this, I'm in a few deals where the GPs have been very good, complete opposite experience. Having a safe forum for LPs the share their experiences is needed.
Cheryl
In EVERY business there are two kinds of market participants; the people/companies in it for the long haul, through both good and not so good economic times, consisting of EXPERIENCED, PROFESSIONALS whose careers are dedicated to and dependent on fulfilling the needs of their clients/customers.
The other type of participant are in the particular business because it’s OPPORTUNISTIC for them to be in it AT THE TIME. This year they’re real estate syndicators; three years hence they’re running and selling oil drilling participations, after that they’re involved in fin tech.
A friend of mine used to do that. At various times during the past 25 years he “specialized” in oil and gas drilling, franchise sales, surgical center investments, office centers, start up incubators, vitamins, mobile washing equipment, cemetery syndications, residential mortgage brokerage, commercial mortgage brokerage, insurance as an investment, long term care insurance, and property development in Mexico.
Investors need to do a thorough background check on the key INDIVIDUALS that they would be relying on to invest and manage their money. Every “resume” is going to be biased to make the individual look better than they are, but a hard reading and further research should uncover some hard facts.
To include some humor, here are some “facts” I’ve seen provided on syndicators websites, and what I think the reality is
1. “Attended” university of Pennsylvania …………… signed up for a free introductory day and never came back
2. Management team has over 20 years experience……..no one has been in any business for more than 2 years
3. Uses big data to identify properties ……….has a subscription to Loopnet
4. No one has ever lost a dollar…………we use new investor money to make up loses of old investors
5. We are with you every step of the way……..until your check clears
please do a thorough vetting of any investment you make, at least if it is a size where a loss will cause you concern.
