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The Art of Raising a Fund with Matt Adler, Founder & Managing Principal of Adler Real Estate Partners

Masters of Moments

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How to Make Money in Private Equity

The key to making money in private equity is to aim for a 10 percent gross IRR, ensuring there is room for unexpected challenges. The focus is on avoiding losses, aiming for a minimum 10 percent IRR on properties. By utilizing a European waterfall model with a low hurdle rate and meaningful promote, the goal is to steadily reach returns. The structure includes an 8 percent pref, followed by a catch-up mechanism depending on the investor profile, ultimately leading to a 20 percent promote for the fund managers.

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