Happy Thursday!
We recently dove deep on a ton of data at GP-LP Match. I’d like to share the PDF with you today along with my thoughts on each slide.
Here’s what we’ll cover:
Capital allocation patterns across property sectors: multifamily, industrial, retail, and more
Markets and strategies LPs are backing
Today’s return expectations
Deal structure trends
This is by far the longest article I’ve put together, so buckle up!
1. Capital allocation patterns across property sectors: multifamily, industrial, retail, and more
Above you’ll see an output of all non-fund equity transactions we’re sent across the platform - the rest of the presentation will all be based on the date we found on all of these transactions and wires that were received by the GPs within this dataset.
A few things to note:
216 deals is a decent sample size!
while the size of an equity raise impacts coinvest, I was still impressed to see a 9.6% coinvest average
On acq fees you’ll notice a very clear trend in the 1-2% range, with a few exceptions that are typically tied to property types that have smaller purchase prices
On the final LP split (if there are several hurdles in a waterfall this would be the last one) you’ll notice quite a range of what GPs are offering across different property types
This would be a good time to remind you to look at the sample size of any given statistic - for example the last two property types only have a single deal each (we’ll come back to Cold Storage and Medical Office later though)
We’ll discuss two types of datapoints below - demand and supply side data:
demand side is what the LPs are looking for (through their filters) or what types of deals are actually getting funded
supply side is what the GPs are submitting - note that we review each deal prior to sending to ensure accuracy of the data, but the GPs can obviously raise on whatever terms they want on the platform
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A few things to note on this one:
The top left hand corner appears to be in a world of it’s own (RV Parks and MHP), clearly showing that GPs in those property types typically have more aggressive splits. The higher acquisition fees are likely due to smaller purchase prices.
The largest sample size here is multifamily with 95 deals - 69% split to LPs with an average acq fee of 1.7%
I found this one to be interesting because there’s a clear trend of upward and to the right among purchase prices above $25mm. Below $20MM PP you’ll see quite a bit of variety, pointing to the fact that GP expectations on splits vary by property type.
A few things on this one:
We’ve only shared a single Medical Office and Cold Storage deals (bottom and mid right) - both got funded and this could be partially due to the property type and GP, but it’s hard to ignore how high their splits are LPs…this clearly matters
RV Parks have the most aggressive spits and the lowest coinvest (despite deal sizes being small many times!)
right above and to right there’s a small breakaway of the other fairly aggressive group, which includes retail, industrial, storage, and MHP
Every single LP can set filters, and this is a chart of the most excluded property types to get a sense of what people are NOT looking for.
I found it interesting to see how many people are excluding STNL and Hospitality
RV Parks and MHP somewhat high on that list, despite having some of the most aggressive splits and lowest coinvests (perhaps this is pointing to an demand supply imbalance)
Now we’ll turn to the LEAST excluded property types with Multifamily being the winner. Interesting to see Mixed Use up there as well, and Senior Living - both appear to be in high demand currently.