Woodfine Capital Projects reaffirms partnership with Relex Development
Relex Development and Woodfine Capital Projects are pleased to extend their partnership as Relex readies to release its platform, affirming a steadfast partnership that continues to provide mutual support.
Peter Woodfine, CEO of Woodfine Capital Projects, has requested another conference call with Relex investors. The previous conference call with the developer was in May. Details regarding this conference call will be forthcoming.
The new platform will reinstate Woodfine USA and Woodfine Canada LP units that had been offered in previous iterations of the investment platform. These LP units will be available for acquisition with RLX.
Other additional offerings through Woodfine Capital Projects will also be available on the platform.
In order to discuss these offerings with Woodfine Capital or any questions regarding the Relex-Woodfine Capital partnership, please feel free to contact them here.
The text below is an article Woodfine Capital Projects COO Mathew Woodfine asked us to share with our investors.
A new “Vanguard” for private equity: An alternative to the 2/20
By Mathew Woodfine
New York, NY
It’s a perennial problem in the world of private equity: over the life of a fund, managers can take in more money, even after expenses, than their investors make in profit. As a result, managers have little incentive to do what’s best for investors. Cutting fees in half would help, but it doesn’t solve the problem.
So how can the interests of private equity investors and managers be realigned, in the same way that Vanguard did for mutual funds?
The solution is simple: overhaul the traditional fee structure so that managers’ compensation takes two forms:
• Unit-based compensation — By taking ownership of the asset rather than the profit, managers become stewards of the asset instead of merely profit seeking.
• Contribution to overhead — For managing the partnership, managers receive a flat fee that is not tied to the net asset value and that serves to cover expenses rather than acting as a revenue stream.
Managers are thus motivated to grow the pie as a whole, and to find true partners who are willing to buy and hold for the long run. To see this model in action, look no further than Berkshire Hathaway.
With this approach in mind, Woodfine has become a pioneer in the real estate sector with a private equity structure organized by Mathew Woodfine to suit the “millionaire next door” market.
Taking limited partnership units as profit realigns the LP/GP relationship in that overcharging of fees is against our own interests. As a result of this restructuring of the capital deck, limited partners benefit from almost the entire 20% gross IRR.
The Woodfine limited partnerships forego traditional bank financing for their real estate debt in favour of a narrow-bank financing model in which the equity is invested by the limited partners and the debt is self-issued by the partnerships, with strict criteria for qualified investments.
The ability to issue debt with the purpose of reinvesting in future construction is what distinguishes Woodfine’s product from conventional real estate offerings. This infinitely replicable model allows repetition of the qualified investments at each of the development sites and creates perpetual equity.
The model differs from private equity in that it provides investors with greater leverage, while adhering to borrowing restrictions that maintain investment-grade ratings.
Mathew Woodfine, Chief Operating Officer
The above announcement is the eighteenth of thirty consecutive days of news brought to you by Relex Development.
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