Why Invest in the Fund Structure?

By: Max Sharkansky, Managing Partner
  • Max Sharkansky:

    Whether it’s our fund or not, I would highly recommend for any investor to invest into funds. First of all, as an investor, you’ve got automatic diversification across several properties, as opposed to just investing in a single property. If it goes well, it goes well. If it doesn’t, it doesn’t. The chances of that happening across a portfolio of properties is much lower.

    I also recommend for investors to invest into funds because the sponsors promote. Their participation of the profit is crossed across every single asset in the fund. If one deal is a bust, it’s going to drag down their profit participation across the entire fund.

    Whereas, if an investor invests with a sponsor in their syndication, and they’re in seven or eight of their syndications, and one deal goes bad, it in no way affects the other properties that they’ve invested in. They would get paid fully, and they will collect 100 percent of their promote on every single property.

    As an investor, if I were an individual investor, I would only invest into funds because it’s easy, it’s efficient, and I’ve gotten much lower risk, and I’ll make more money, ultimately.