FEATURED ARTICLE
FUND RAISING CONSIDERATIONS A CPA’S PERSPECTIVE By Henry Chavez, Principal, Spiegel Accountancy Corp.
F
und raising is an exciting
a
preferred
return
event in the life of a fund and
one solely based on allocable net
for fund managers. It’s the
profit. Accordingly, it’s important
excitement of building something
to
new or taking it to the next level.
preferred return.
understand
the
rather
basics
than
of
a
Fund raising is also competitive
what type of preferred return you should offer. Is it compounded or noncompounded? Compounded means the calculation
with many types of deal structures
WHAT ARE THE MECHANICS OF A
of a preferred return’s periodic
to entice potential investors. The
PREFERRED RETURN?
growth amount comes from the
most common trend today involves
There are certain questions to consider
amount of invested capital plus
mortgage or debt funds offering
when it comes to understanding
all previously earned but unpaid
50
