Simplifying the process of sifting, sorting, and relaying data for 'wire day' gives investment firms more time to focus on LPs and properties, which means happier investors and a better pipeline for future deals.
Sophisticated GPs are using automated software tools that allows for automatically calculating each investor’s pro rata ownership, import waterfall calculations, include GP promote components, and adjust tax withholding percentages.
The rest of the world is moving toward embedded banking and automated payments. Why not commercial real estate? Learn how GPs are using real estate investor portals to further streamline business operations and investor management.
Commercial real estate (CRE) GPs have plenty on their plate on a daily basis. In charge of real estate deals from their inception to their end entails many responsibilities, from finding investment opportunities through their network, executing most decisions about the fund or deal, raising capital for those deals from limited partners (LPs) distributing funds, and managing investor relations. All the while, GPs have assets to grow and a firm to lead.
Complicating matters is a massive uptick in interest in CRE throughout the pandemic, with the end result being more capital available in the market than deal opportunities. According to research published in The Wall Street Journal, commercial real estate sales hit $809 billion in 2021 — more than twice the 2020 level and a remarkable increase from the $600 billion sold in 2019. Demand is expected to remain high in the near future as well, with the 2022 U.S. Real Estate Market Outlook by CBRE citing a five to 10 percent increase in 2022.
Clearly these factors present an opportunity for growth for GPs, but only if they can also manage the challenge of finding the time to discover and vet new deals and managing additional investors. This brings us to one of the most important responsibilities for GPs: distribution payments.