General partner co-investment alongside experienced operating sponsors. H Equities provides co-GP equity from $1MM to $4MM, contributing capital alongside the GP and participating in promoted interest, for operators who need balance sheet support to close.
Overview
Co-GP equity is a form of investment where a capital partner invests alongside the general partner (GP) or operating sponsor of a commercial real estate transaction. The co-GP investor contributes capital to the GP's side of the capital stack, effectively sharing in the GP's obligations and participating in the promoted interest (also called the promote or carried interest) that the GP earns for managing the investment. This is distinct from limited partner (LP) equity, which sits in a passive position below the GP.
Co-GP equity is used when an experienced operating sponsor has identified a strong deal but does not have sufficient capital to meet the GP equity requirement. Many joint venture agreements require the GP to contribute a meaningful amount of its own capital to align interests with LP investors. Co-GP capital helps the sponsor meet this requirement, demonstrate commitment to the deal, and close transactions that would otherwise be out of reach due to balance sheet constraints.
H Equities provides co-GP equity from $1MM to $4MM. We partner with experienced operators who have a demonstrated track record, a clear business plan, and institutional-quality deal execution. We contribute capital, not just a check, bringing structuring expertise and capital stack knowledge to each partnership.
Key Parameters
Use Cases
Joint venture agreements typically require the GP to contribute a meaningful percentage of equity. Co-GP capital helps sponsors meet this requirement when their own balance sheet is stretched across multiple deals.
Operators with strong track records who are growing faster than their personal capital allows. Co-GP equity enables sponsors to pursue multiple deals simultaneously without being capital-constrained.
Provide the financial strength that LP investors and senior lenders look for when evaluating a sponsor. Co-GP capital demonstrates additional backing and commitment to the deal.
Talented operators building their track records who need a capital partner to help them compete for larger deals. Co-GP equity provides both capital and credibility.
Process
Present the deal, your track record, and the GP equity need. We evaluate the sponsor as much as the deal itself.
We agree on the co-GP structure including capital contribution, promote split, decision-making authority, and key-person provisions.
We document the co-GP arrangement, typically through a GP-level operating agreement, and fund our capital contribution at or before closing.
We work alongside the sponsor through the life of the deal, providing capital stack perspective and structuring support as the business plan is executed.
FAQ
Co-GP equity is invested at the general partner level, alongside the operating sponsor, and participates in the promoted interest that the GP earns. LP equity is invested as a limited partner, receiving a preferred return and a share of profits but not participating in the GP promote. Co-GP investors share in both the upside and the obligations of the GP.
We look for operators with a demonstrated track record of executing similar business plans in similar asset types and markets. We are not exclusively focused on the number of deals completed but on the quality of execution, the sponsor's operational capabilities, and their ability to manage the specific business plan being proposed.
The promote split between H Equities and the operating sponsor is negotiated on a deal-by-deal basis. Factors include the relative capital contribution, the sponsor's role in sourcing and managing the deal, and the overall risk profile. Our goal is to structure a split that aligns incentives and fairly compensates both parties.
H Equities provides capital stack and structuring expertise but does not typically take over day-to-day property management or leasing. The operating sponsor retains control of property-level operations. We are available as a sounding board for strategic decisions and capital events.
Yes. Co-GP equity can be combined with other H Equities capital solutions, such as mezzanine debt or preferred equity, in the same transaction. This allows us to participate at multiple levels of the capital stack, providing a more comprehensive capital solution for the sponsor.
The hold period matches the business plan of the underlying deal, typically 2 to 5 years. Co-GP investments are not structured as open-ended commitments. The investment is tied to the execution and exit of a specific property or portfolio.
Learn More
Tell us about your deal and your track record. We partner with operators who execute.