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Unfortunately, that joint venture partner expertise comes at a steep price: richer property management fees, an asset management fee plus carried interest. If the institutional investor is fronting limited partner capital, they are taking their own fee and carried interest, too. By the time the return gets to the limited partner, it has been so scraped by fees that the gross to net IRR spread can be huge. Limited partner beware; of course this is the case for most closed-end fund set-ups also.
Posted by Kento | Wednesday, October 17 2012 at 5:53PM ET