We have a dedicated in-house team to fully underwrite each transaction and complete a comprehensive due-diligence on our investments or the investments of our sponsors. This helps mitigate risk and drive sound investment strategies. We perform or oversee due diligence on:
- The RE Target: Prepare a financial model, offering memorandum, tenant analysis, deal structure, legal review and usage/impact studies;
- The Market: Provide overview on the specific markets including demographics, supply and demand conditions, catchment, and comparable transactions;
- The Partner or Operator: Operator experience, track record, performance metrics and operating platform;
- The Legal Landscape: Overview, generally supported by specialized 3rd party legal counsel, on tax, structuring, local regulations, recourse, indemnities and underlying securitization;
- Optimal Capital Structure: Understand, prepare and test lenders for markets for optimal debt to equity mix for the capital stack;
- Data Room: Develop and maintain data room access, through our Navigator portal, for our investors on target transactions.
INVESTMENT COMMITTEE PREPARATION
Working with some of the largest real estate private equity investors, Hussar seeks to underwrite each deal to the highest industry standards. Ideally, our internal Investment Committee process will mirror the investment selection and committee approval criteria for most our clients/investors. We are open to incorporating specific requirements into our approval process for certain investors who seek Hussar & Co. to offer a more tailor-made approach to their due diligence standards.
We seek to overlay our Investment Committee approval with our equity and debt facility provider. This coordination enables us to fully commit to transactions with speed and certainty of execution.
The Hussar Investment Committee then invests, typically under a separated managed account structure, or directs its investor(s) to allocate directly in transactions which we have aggressively pursued and which have achieved Investment Committee approval. We strive to maintain a deep co-commitment to closing deals we bring before committee.
Not all attractive properties match the criteria of our specific mandate(s). In such cases, and with owner/seller interest, we can make introductions to our sell-side capital markets partner, H Quadrant Capital Advisors, LLC (H Quadrant Capital). H Quadrant Capital, headquartered in New York. H Quadrant Capital manages broader market relationships to debt and equity providers and operate as a semi-autonomous team representing, as lead advisors, owners in sales or property finance needs of their properties. Click here to access H Quadrant Capital.
We believe in optimizing real estate assets and maximizing investor return. This allows for the creation of a base line to best manage risk and a upside to best manage upside and opportunity.
Active asset management is a cornerstone to our investment philosophy. Typically, as opportunistic investors, Hussar & Co. will often highlight properties where there is a deficiency or shortfall in the investment that can be enhanced through repositioning, expansion, capital investment or sales and marketing enhancements. We are in constant dialogue with local operating partners and seek various control rights on behalf of our investors. We prepare each Information Memorandum and underlying business plans for each target property so we have the road map established and agreed up-front, and we know how to set the metrics and on-going reporting to ultimately achieve the pre-agreed goals for our clients and investors.
Hussar & Co., through its operating partners and co-investors, typically take majority/control equity positions in most of its transactions. Day-to-day management can fall to local operating partners, but Hussar & Co. and it investors typically seek control in major decision rights for its target properties.
Investments are typically structured as limited partnerships although they can also be structured as SPV’s for investors seeking to acquire 100% of the target or asset. For each investment, Hussar seeks to co-investment with a local or strategic operating partner. This operating partner typically invests alongside us in the transaction and is responsible for day-to-day management of the property. We assume responsibility for performance management, reporting, and major decisions on behalf of our investors.
Our “sweet spot” for an equity allocation is typically around EUR 35 million, however the model allows us to go as low as a EUR 10 million and as high as EUR 200+ million of equity, providing for total transactions typically ranging from EUR 25 million to EUR 500 million fully leveraged.
HOLD PERIODS & EXITS
Our hold period is roughly 5 years which is in line with the traditional private equity model. Our targeted exit strategy is always built into to each of our investment thesis prior to any investment committee approval. Exits strategies include a trade sale to a real estate investment fund, institutional investor or strategic buyer in the case of managed properties such as hotels. Take private and go public strategies are also considered on a case by case basis, but only when sizable portfolios are in question.
If you would like to speak with us about a sell-side need or want us to introduce you to our colleagues in New York running our Sell-Side efforts H Quadrant Capital, please do not hesitate to contact us. We would love to put you in touch. Let's talk →