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Equity Fund Information

Invest in a portfolio of multiple properties for instant diversification.

  • You get an equity ownership stake in the fund.
  • Project types include ground-up construction and value-add projects.
  • 1–3-year time frames.

Investing in an Equity Fund

The equity fund is set to launch in mid-2024.

A real estate equity fund is an investment vehicle that pools money from multiple investors to invest in real estate assets.

Real estate equity funds offer instant diversification by allocating funds across multiple properties of varied types. When investing in an equity fund with Gatsby Investment, you are awarded an ownership stake in the underlying properties, which provides a more stable form of investing and the chance to maximize your ROI.

Gatsby Investment is the manager of the fund. We identify opportunities, conduct thorough due diligence, and oversee each asset, and implement the underwritten business plan with a focus on maximizing returns while minimizing risks.

If you want to invest in multiple types of real estate, but don’t have the time or interest to select specific properties, read through multiple offering memorandums, and send multiple wire transfers to build a diversified portfolio, an equity fund may be a great option for you.

With Gatsby’s equity fund, you invest in pre-vetted deals, gain immediate portfolio diversification, and get the simplicity of a single K-1 tax form.

The Benefits of Investing in an Equity Fund

No cap on returns.
Equity investors’ returns are based on the financial performance of the asset, so you can potentially earn a greater return than originally estimated.
Diversification.
Spreading your investment across multiple properties helps mitigate risk. If one property underperforms, the performance of the other properties in the portfolio may help balance the overall returns.
Professional management.
The fund is managed by professionals who specialize in real estate investment. The fund manager makes decisions on property selection, acquisitions, and overall portfolio management, allowing you to leverage the knowledge and experience of experts to maximize your returns.
Less work.
Busy investors may prefer funds over owning individual properties as they are able to outsource the work and will need to make fewer decisions, fewer wire transfers, and file fewer tax forms.

What is the Difference Between Fund Investing and Deal-by-Deal Investing?

With fund investing, you invest in a portfolio containing multiple properties. The key benefit of fund investing is the automatic diversification that comes from spreading returns and risks across the entire fund portfolio.

Deal-by-deal investing allows you to choose the specific project(s) you wish to invest in. The key benefit of deal-by-deal investing is that you have more control over your portfolio.

How Equity Fund Investing Works with Gatsby

When you invest in a real estate equity fund, you own a share of a diversified real estate portfolio.

Fund investors contribute capital to the fund. This investment is pooled with money from other investors in the fund and is used to purchase existing properties and/or construct new developments to generate returns for the investors.

The real estate equity fund is managed by Gatsby Investment, who sets up the fund and outlines its investment strategies and goals. Gatsby makes decisions on behalf of the investors, selecting, acquiring, constructing, managing, and selling the properties. As the projects are completed and sold, the equity investors in the fund earn a share of the profits, based on the amount they invested.

Fund Property Criteria

Gatsby’s real estate equity fund has a strong focus on opportunistic and value-add projects that are built-to-sell.

The assets inside the fund are typically a mix of different projects from Gatsby Investment’s product line. For example, the fund may include both single-family and multi-family properties with a combination of strategies such as renovation and ground up construction projects.

We target properties with the potential for substantial value increase through improvements and appreciation. We look for properties in areas with strong economic growth, high demand, job opportunities, and proximity to amenities and infrastructure. We also confirm that properties have favorable zoning for new developments.

Each of our real estate equity funds will state the overall strategy of the fund and the types of projects included in the fund in the details section of the offering.

Risk Management

Gatsby’s professional team of experts creates a sound business plan and strategy for each fund prior to opening the fund for investments. We conduct a thorough due diligence process to assess and mitigate risks associated with the chosen properties, including market risks, regulatory risks, and potential challenges in the development process. Before we purchase any property, we complete property inspections, financial analysis, and an assessment of market conditions.

Gatsby’s compensation is largely based on investment performance. This means the fund must do well for Gatsby to earn a share of the profits. Additionally, Gatsby’s founder invests alongside the fund investors, under the same terms as the other investors. Throughout the history of Gatsby Investment, Gatsby has never failed to return a profit to investors on a completed project. We have a 100% success rate of profitability.

Capital Contributions

Gatsby’s funds operate on a first-come, first-served basis. The investment opportunity will be listed on the investment page, specifying the terms and objectives. Investors can read through the Private Placement Memorandum and commit a certain amount of capital to the investment. Once you have placed the investment, you will have five business days to transfer the investment capital to activate your investment.

Equalization Structure

Every Gatsby Fund has an equalization structure for its investors. The equalization structure is designed to ensure that profits and losses are distributed among partners in a fair and equitable manner. This structure ensures that each investor enters the fund under the same conditions, which allows the fund manager to balance the distribution of profits based on the amount invested.

Closed-Ended Fund Structure

Gatsby’s equity fund is a closed-ended fund with a fixed number of shares issued during its initial public offering. Once the fund is closed, the fund does not continuously issue or redeem any shares.

Equity Fund Term

The fund is structured to last for a fixed term. The specific timeline for an equity fund will be specified under the “details” section for each fund’s investment page. On average, equity investors will stay committed to the fund for an estimated 1-3-year period. Investors receive their capital back as the properties are completed and sold.

Reporting

Throughout the investment period, the fund manager provides regular project updates, financial reports, and other relevant information to investors. This transparency helps investors stay informed about the project status and performance of their investment.

Returns/Distributions

Investors will have access to an estimated ROI and annualized return upon placing an investment. Gatsby cannot guarantee any profits, but the estimation will help you get an understanding of what to expect, as well as compare different investment opportunities to see what best fits your investment goals.

Equity investment funds do not offer cash flow since their strategy is focused on opportunistic and value-add projects, rather than rentals. Investors will see returns when properties in the fund are completed and sold.

So instead of receiving a lump sum, you may receive multiple distributions toward the end of the fund term as assets are sold. Returns are prorated based on your share in the fund. Returns are distributed to investors via wire transfer.

Placing an Investment

Gatsby Investment’s Equity Fund is set to launch in mid-2024. Investors who have an account with Gatsby will be notified via email once the investment becomes available.

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