Fiduciary Duties in Syndications: Key Principles

Fiduciary duties form the backbone of trust between syndicators, fund managers, and their investors. For anyone managing investor capital—whether in real estate syndications or private investment funds—understanding and honoring these duties is not just a legal requirement, but a key to long-term success.

This discussion outlines the five essential fiduciary duties every syndicator should embrace: the duty of loyalty, care, disclosure, confidentiality, and impartiality. Each plays a critical role in maintaining investor confidence and regulatory compliance. Loyalty means putting investor interests first and disclosing potential conflicts. Care involves thorough diligence and making responsible decisions with entrusted capital. Disclosure ensures that all material facts are shared transparently with investors, especially before they invest. Confidentiality protects investor identities and investment specifics, building credibility. Impartiality ensures fairness in actions like redemptions, treating all investors equitably based on their proportional contributions.

Grasping these principles not only minimizes legal risks but also strengthens relationships with investors who will be more likely to reinvest, knowing their capital is being handled with integrity and professionalism.

Read more about syndications and funds: https://www.moschettilaw.com/syndications-and-funds/

Read more about real estate syndication: https://www.moschettilaw.com/real-estate-syndication/

Moschetti Syndication Law Group is a boutique syndication law firm, serving small and growth-bound syndicators, as well as private equity firms. Our attorney, Tilden Moschetti, is determined to keep the firm’s ‘boutique’ size so we can tailor the services to each client’s unique needs without turning the firm into a faceless factory churning out private placement memorandums or passing unnecessary overhead expenses onto our clients. (As our client, you’ll only pay a fixed fee, so no surprises.) As for the client experience, we give real-time answers with Tilden Moschetti without making you book an official appointment or get passed along to associates or paralegals. We’ll work with your ambitions and overall vision to help you close the current deal and fill in that ‘missing’ piece – whatever you need – to keep adding more syndications to your portfolio. We keep syndicators syndicating (TM).

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