Today, the term is increasingly used in the context of real estate investments, where a small number of investors join together to finance or acquire a real estate project.
In Switzerland, the term is also known as "consortium".
These investors are mostly wealthy private investors, family offices as well as asset managers part-owners.
"Club deals" are now a popular form of investment and are becoming increasingly popular around the world....
For most family offices, real estate plays an essential role in the investment portfolio.
The challenge is usually to obtain attractive properties in a highly competitive market.
"Club deals" solve this problem because they enable investors to make investments that they would not be able to make on their own, for example due no possibility of access, know-how or financial resources.
Why this is so lies in the special structure of club deals: a separate investment company is usually founded for each property.
Its purpose is to acquire the suitable property, develop it, hold it and sell it at a suitable time.
The advantages of this structure are obvious: the investors benefit from greater transparency, direct say and better opportunities to influence and inform.
Since their number in a club deal remains manageable and the performance interests are usually concurrent, the exit process is also uncomplicated.
What makes a club deal successful?
Experienced initiators of a club deal make sure that the investor group is as homogeneous as possible.
Another decisive factor for the future success of a club deal is the way in which the acquisition, holding, development and sale of the property are structured.
A "club deal" with a predictable exit structure is recommended.
How long is the investment horizon?
Generally speaking, family offices often look for the highest possible internal rate of return (IRR).
This interest then also influences the terms of the club deals in the various risk classes. Depending on the investment, the rule for the term can be between three and ten years.
The investment size is usually between CHF 1 and 10 million per investment, depending on the size of the family office.
Which specific target markets and trends are particularly attractive for club deals?
Family offices are very happy to invest in markets that are facing different challenges, so the USA, Great Britain and Germany and of course our Switzerland remain the most attractive target markets for real estate investors.
The figures also show this: For example, the share of investments in Europe has reached new record highs, yet the USA remains the clear global number one in terms of inflows.
Besides institutional investors, family offices were also a major driver of this development: In the past decade, family offices completed most of their investments in the real estate sector - in terms of the number of transactions, mind you.
The trend continues in 2023, where investments are also screened for sustainability criteria.
The fees of a "club deal" are not comparable to a cost structure in a real estate fund.
The interest of a "club deal" aligns its cost structure with the goals of its investors, who usually aim for the most attractive possible sales proceeds (IRR).
This means that club deals usually do not have high ongoing asset management fees or upfront fees as is the case with real estate funds.
Most club deals therefore provide for reduced upfront fees and low management fees, but so-called "waterfall structures", from which the initiator profits from an IRR agreed in advance with the club investors.
To what extent do private investors have access to club deals?
"Club deals have become more and more popular in the recent past and have increased significantly in the last five years in particular.
In 2021, for example, according to a study by PWC, Club deals accounted for around 33%
of the total transactions supported by family offices.
The high demand for club deals is driven by several factors:
On the one hand, capital can be spread over several real estate investments, thus contributing to diversification and risk minimisation in one's own portfolio.
On the other hand, current global political and economic developments play a major role in the investment decision.
Current "Club Deals" with our worldwide respected, professional and competent partners.
Spain 🇪🇸
New building project in Palma - Mallorca
Construction of 8 luxury flats
Total volume around 10 Mio Euro
Exit: 2025
IRR: min. 17.07%
Minimum investment: 400'000.- Euro
coming soon:
Switzerland 🇨🇭
Zermatt
Project Hospitality / Residences
Total volume around CHF 300 million
IRR: 8.32%
Exit: 2031
Minimum investment: 1 million CHF
USA 🇺🇸
Chicago
Hospitality
IRR: follows asap
Exit: follows asap
Minimum Invest: follows asap
Exit: follows asap
My primary goal is to arrange investments that offer the security and opportunity for a sustainable return in your portfolio.
direct contact: Manuela Olmesdahl
Phone : +41 76 376 61 11
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