It takes a visionary to create. To create from nothing.
To labor in time, defer short term gratification and create something that is the best.
At Trebuchet, we make great things.
Take our funds, they are the best in class because we are willing to do the things others don’t want to.
We defer, eliminate or refund our management fees, we give higher profit shares to our investors than our competition. We create rare funds that go into areas that others cannot. We create exclusivity because we choose our investors carefully. This is how great funds are structured and how we give the best chance to over-perform. We are vertically integrated and can control labor and materials costs in a way that most private equity and one off deal-by-deal investments cannot.
The company is named after a Trebuchet because it was devastatingly effective siege weapon- by it’s nature it created change. A kingdom, just to see the sight of them at their walls, would cause change. By disrupting the industry, we raise the bar. The real estate sector doesn’t have many innovators, the ones that do are household names. The rest are, at best forgettable, and at worst can have very negative impact on your portfolio returns.
For our retail funds (funds with under $250m in EUM) we saught to change the landscape and have some fun building new residential structures in the “affordable luxury” category. We believe we can serve both the investor and buyer of our products, because creating quality is all that we know.
In our retail real estate funds, all committed capital is called on close and deployed rapidly according to the investment thesis. The thesis is the cornerstone investment proposition, we use a top to bottom perspective to look at real estate sectors. When settled on the sector, geography is progressively narrowed to a workable range. When a location is found, we start to meet city officials, speak with consultants, engineers to discover idiosyncrasies, difficulties, and zoning issues in that area. Criteria for a chosen location is combination of upwards pricing, short sale times, a lack of supply, constraint issues and positive external factors contributing. When looking for acquisitions, we cast a wide net again, using brokers, consultants, municipal officials, and competitors. In tandem, we campaign with data extracted from various data bases and conduct exhaustive on the ground searches. From this combination, we get deal flow and start in on the due diligence, negotiation, financing options and closing of selected land on which to build.
Mankind has been building houses for centuries. Despite being very well established, it is one of the most inefficient manufacturing sectors. Inefficiencies, are lost margin percentages. In residential building, the trade-off is quality vs efficiencies. For example, building on site is inefficient vs building at a factory, but is final product is not acceptable for luxury building. To help recapture margin, in processes we cannot change, we vertically integrate, saving on materials and labor. Through the building process we are measuring, identifying, analyzing, and improving the process where we can with the aim of having a coveted, highly sellable product and top quartile returns.
Have questions about the real estate fund?
As we grow, we integrate. This means we are looking at strategic acquisitions, startups and partnerships at the General Partner level to yield a competitive advantage in building. See our page on our vertical integration strategies for our businesses.
No Conflicts, No Old Deals
We don’t recycle old deals, deal by deal may move to slow to close. Many funds buy or have previous inside ownership creating lower returns and serious conflicts of interest- we don’t seed funds with “top of the market” deals or make it an internal strategy to have our investors take on significant risks with private to public liquidation strategies. We also do not market, “one off” deal-by-deal structures for the reasons we discuss here.
Canadian Investors Can Access USA Assets
As Canada gets progressively more restrictive towards its citizens, Canadian investors would be wise to move assets offshore and diversify holdings. Real Estate in foreign countries such as America are more liquid in their economy. But Canadians investing directly into USA originated real estate funds or buying property directly will be subject to tax up to 54% and have to report their world wide holdings directly to the IRS and file US taxes. Retail US funds are not structured to take foreign investment. But we are and tax optimised, using an offshore solution we are able to have the fund entity report to the IRS without any of our investors having to report or file taxes in America.
Investor Oversight- Board Director Opportunity for Investors
Our real estate funds are governed with a Investment Committee Board of Directors. The board members are chosen from the fund’s investors, mirroring institutional funds. Unprecedented in a retail fund. It provides a conduit to the General Partner of the fund and seeks accountability in the decision making of the GP. This is an outstanding way for investors to gain valuable board experience and use this to transition to other board roles in government boards, and public/private companies and other funds.
Transparent Fund Structure
Our customer is the investor. Regardless of investor or investment, we can only work with investors that are aligned with us. A transparent fund structure a clear investment strategy and a documented investment process helps solve the majority of LP issues with GPs. Typically our terms are only found in large institutional funds.
Modular Organization Structure
Risk is lessened with a modular structure. In a operating fund, management can be swapped with 3 phone calls or less. Organization risk is less than other firms. This also means Trebuchet can scale very quickly without being bulky and overweight. Fiduciary duty and care is baked into Trebuchet by the structure.
Institutional Private Equity Terms- Retail Investment Size
Retail investors have little options for private real estate funds. The majority have no oversite, large fees, high overhead, and meager net of fee returns. Trebuchet is interested in opening this for investors to show high returns to future institutional investors and have past investors participate in new offerings.