Client Profile
Clients are looking for a straightforward structure to raise capital from investors and deploy it efficiently into real estate projects (most commonly during the development or construction phase). The primary target markets were fast-growing regions such as Spain, Portugal, and France.
The Challenge
Traditional fund structures tend to be unnecessarily complex for this type of strategy and create high barriers:
– Regulatory Infrastructure (they require depositories, fund administrators, ISIN registration, and extensive additional reporting obligations);
– High Costs & Time (they involve higher setup and operational costs alongside a longer time-to-market);
– Need for Flexibility (clients need a simple, cost-efficient structure, fast investment execution, and the flexibility to invest in different jurisdictions without lengthy approval processes involving third parties).
We analyzed the challenge of Consolidating Family Assets
We analyzed the needs of project developers and investors. The key criteria were the speed of reaction to market opportunities, the freedom to choose the most suitable investment instrument for each opportunity (loans, equity, or hybrid arrangements), and the ability to legally fund projects located outside the home jurisdiction.
Implementation of an Asset Management Company (AMC) as a central hub for managing family capital
We settled on a combination of an Asset Management Company (AMC) with dedicated Special Purpose Vehicles (SPVs) for each project.
1. Financing Methods: The AMC can invest in projects using various methods, including direct equity investments, share acquisitions, loan financing, or hybrid financing arrangements.
2. International Flexibility: The AMC can invest in projects located outside its home jurisdiction, allowing clients to access international market opportunities wherever they arise.
Why We Recommend SPVs
Separation of Risks: Each project will be isolated within its own separate SPV. The real estate asset is owned by the SPV, while investors participate through the investment structure rather than through direct property ownership, helping to avoid common legal and tax challenges.
Clean Accounting: This model ensures cleaner accounting, clear separation between individual projects, and simplified risk management.
Flexible Profit Distribution
This AMC + SPV model provides maximum flexibility in distributing investment returns:
1. Loan Financing: The AMC may finance an SPV through a loan, allowing investors to receive a predefined fixed return while excess profits remain within the SPV;
2. Equity Investments: Alternatively, the AMC may participate as an equity investor, distributing profits only upon completion, refinancing, or sale of the project;
3. Operational Independence: SPVs do not need to be incorporated in the same jurisdiction as the AMC. Establishing them directly where the property is located simplifies legal, tax, and operational matters.
“Buy land, they're not making it anymore.”— Mark Twain
The implemented structure delivered:
Structure: A flexible and efficient international framework (AMC + local SPVs) for raising investor capital.
Scalability: The framework remains simple and scalable, allowing new projects to be added seamlessly without altering the core structure.
Economics: A cost-effective solution compared to traditional real estate funds.
Execution Freedom: Full operational freedom for the manager to choose investment strategies, financing methods, and profit distribution mechanisms that best suit the goals of both investors and developers.
This framework is the ideal "escalator" for.
This structure is ideal for private investors and project developers who are pulling investor capital together for construction and development projects (specifically in Spain, Portugal, and France) and want to launch new projects quickly without building cumbersome funds.
Regulatory Depth
This approach allows clients to completely bypass the rigid infrastructure of a traditional real estate fund (no mandatory depository or fund administrator at the AMC level). This maintains compliance at a highly practical, streamlined level and guarantees high execution speed for cross-border investments using intra-group financing tools.
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Expand & Invest with our experts
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FinCzech. office:
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Alexander Yakimenka, LLMCo-Founder & Chief Executive Officer