Typical Private Equity Deal Structure

Unlike other investment funds, hedge funds have greater flexibility to employ a range of strategies. They can acquire real estate properties directly, own and manage them to generate income from rent or resale.

Structuring of direct investments

A private equity deal structure includes identifying a target company or asset, evaluating its condition, completing a transaction to acquire a significant stake (at least 10 percent of the share capital), participating in the company’s management, and exiting with a profit. This process is aimed at gaining control over the business for its subsequent sale.

Real estate private equity deals include various transactions, such as direct acquisitions, sales, leasing arrangements, and equity participation in construction projects or real estate investment funds. Investments may be made through acquiring a stake in a development or completed property, through mergers and acquisitions, or by establishing joint ventures.

Example of direct real estate investments

Typical deals:

• an investor directly owns and manages real estate properties, receiving income from rent or future resale. Example: a company purchases an office building in the city center to rent it out.
• direct participation through creation or acquisition: the investor acquires a stake in a real estate company or develops a new property from scratch.
• investment platforms — they pool capital to implement a large construction or development project.