Syndication is a partnership between several investors wherein they pool their finances to be able to invest in properties or projects. For some investors, syndication is their way to begin their career in the industry. But, what if one syndicator or partner needs to exit the syndication for whatever reason? How can this be done?
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In today’s episode, we pick the brains of Jackson Stith and Simen Ruge, co-founders of real estate capital markets intermediary SyndiGate. SyndiGate is a unique intermediary that raises new equity and helps LPs and GPs recapitalize their real estate equity investments. Jackson and Simen elaborate on the process that they do for them to be able to help the investor to exit a deal or liquidate. We have a very interesting discussion ahead so click the play button now!
Key Points From This Episode:
- Jackson and Simen talk about their focus on the real estate market and their business model.
- Jackson and Simen elaborate on the problem they found in real estate syndication.
- How you can reach out to Jackson and Simen if you want to exit syndication?
- What investors should be asking before getting into syndication?
- Jackson and Simen share how they work with the operator when an investor wants to exit syndication.
- Is there a limit on doing the transaction for exiting the syndication?
- Pros and cons in exiting the syndication early as an investor.
- The process that Jackson and Simen could provide to those who want to be out of a deal and the types of investors they’re helping.
- Jackson and Simen’s predictions in the real estate market over the next six to twelve months.
- The daily habits that Jackson and Simen are disciplined about.
- Their best source for meeting new investors right now.
- The number one thing that contributed to their success and how they like to give back.
“I discover that one of the biggest problems in real estate syndication is that there is no secondary liquidity for these very big financial positions and in a lot of ways, it’s an untapped market.” [0:02:56]
“The network of investors that we deal with is really institutional money.” [0:11:47]
“From the sponsors’ point of view, they’re actually being introduced to a whole new source of capital. That if they have ambitions to climb the value ladder and do bigger, more profitable, more complicated deals or just to expand their current platform and do more deals, it’s actually a new source of capital they’re being introduced to.” [0:12:11]
“A key part of what we do is to understand the person you are dealing with, understand their motivations of what they wanna do, and see who they are. I think it’s important to understand and consult the network around you.” [0:18:30]
“It’s about reconfiguring the capital stack, pulling out some equity because they wanna put some money down on some land that they wanna develop over here. The solution is maybe a solution for many different problems that they have in different places than necessarily related to this deal.” [0:21:56]
Links Mentioned in Today’s Episode:
About Simen Ruge
Prior to co-founding SyndiGate, Simen was an investment banker in London responsible for selling and executing securities and derivatives transactions totaling billions of dollars per annum. Simen was repeatedly given tailor-made opportunities to create and manage client franchises by such notable banks as Barclays, UniCredit, and State Street.
Having onboarded his first client 6 months into the graduate program at State Street Global Markets, he went on to build their Equity and Fixed Income sales franchise in the Nordic Region as an AVP. He was recruited to UniCredit in 2012 and lead the growth of their Nordic Fixed Income franchise as Associate Director, achieving 40% growth over his last 3 years alone. He joined Barclays as a VP in 2017 and rebuilt their Nordic Fixed Income franchise doubling their business in 18 months.
Prior to his career in finance, Simen fulfilled his national duty in the Norwegian Armed Services, where he earned the rank of Corporal, Infantry Squad Leader. He graduated with Honors from the University of Edinburgh in 2009 with a degree in Economics. Simen holds the series 7, series 63, and is a registered representative of Old City Securities LLC.
About Jackson Stith
Prior to co-founding SyndiGate, Jackson had a successful career in real estate acquisitions and development, working with several highly-regarded real estate development firms throughout the United States and Dubai.
Over his career, he has been responsible for the acquisition and development of over 9M SF of real estate across multiple property types, including hospitality, casino, retail, multifamily, and entertainment. The resulting value-in-place he brought to market totals over $9Bn, while the total value of all assets in which he has had an influential hand approaches $25Bn.
Much of Jackson’s experience has been devoted to pre-development activities, including underwriting, due diligence, and debt and equity raise for real estate deals of the highest complexity.
Prior to his real estate career, Jackson worked in the Structured Finance department of JPMorgan Chase and attended Vassar College to earn a BA in International Studies. He also attended graduate school at NYU, where he earned a Master’s in Real Estate Finance.
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