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Real Estate Joint Ventures: Waterfall Structures, Developer Promote, IRR Lookback, Clawback and Catchup [Full] Event Code: 170726LU
This event is fully booked. If you would like to be put on the waiting list, please click here, complete the form and submit it online. When there is seat available, we will inform you by email.

Date 26-Jul-2017
Time 12:15 p.m. - 1:30 p.m.
Venue 14/F, BOC Group Life Assurance Tower, 136 Des Voeux Road Central, Hong Kong
Speaker(s) Mr. Scott D. Peterman, CFA
Partner, Orrick, Herrington & Sutcliffe
Fee HKSFA Member(s) at HK$150.0/person
CFA Candidate(s) at HK$230.0/person
Guest(s) and Non-member(s) at HK$300.0/person
This seminar is qualified for 1 CPT hour(s), 1 CE hour(s), 1 RBV CPD hour(s)
Remarks > CFA Society Global Passport Program Eligible  
# CFA Candidate(s) for Year 2017/18 only.
- Sandwiches and drinks will be provided.
- Only Visa and Master Card are accepted for online payment.
- Language: English

Event Details A real estate JV or private equity real estate fund distribution waterfall uses a typically complex mechanism to answer what appears at first blush to be a simple question: when does the fund manager begin receiving distributions of "promote" ("carried interest" in private equity lingo), and how much of the "promote" is ultimately paid to the fund manager?

A JV in the real estate context is a contractual business undertaking for profit between two or more parties. For example, an institutional real estate investor might join up with a local real estate developer or operator to acquire, develop, and operate a real estate project.

This kind of joint venture would typically take the form of a limited liability company (LLC) or limited partnership. Typically, cash from the partners in a JV comes into the JV via cash contributions, and cash generally comes out of the JV to the partners in the form of distributions.

There are usually multiple levels of distributions, and these distribution levels are commonly referred to as "distribution waterfalls" because the excess at each level of distribution spills over to the next level down, like a champagne waterfall, where layers of glasses are stacked, one upon another. Once a layer is filled, the champagne cascades into the next layer of glasses below -- in the manner of a waterfall. This seminar will introduce and explore some of the many variations of distribution waterfalls that seek to answer the question above in a variety of ways.

This luncheon seminar will focus on several of the more common distribution waterfalls that are used in real estate joint ventures and private equity real estate funds.

Particular attention will be given to understanding the differences between IRRs, time-weighted returns (TWRs), and preferred returns when each is used as a "hurdle" to allocate investment profits between investors and the sponsor / manager of the JV or fund. Each of the above hurdles has nuances that are important for investors and fund managers alike to understand.

About the Speaker

Mr. Scott D. Peterman, CFA
Partner, Orrick, Herrington & Sutcliffe

Mr. Scott Peterman has extensive experience in forming all types of funds, from large pan-Asian private equity and venture capital funds to infrastructure and real estate funds, private REITs, hedge funds, hybrid funds, emerging manager platform funds, Hong Kong authorized funds, and emerging market ETFs. He also has concluded more than 150 separate account arrangements, representing a range of sovereign wealth funds, universities, seeding and first-loss capital programs, family offices, and high net worth investors, as well as a host of other bespoke single-investor and single-investment arrangements.

In addition, Scott's prior, 13-year career as a Silicon Valley senior executive active in the software, hardware, and telecommunications industries has led to a thriving transactional practice in Asia's TMT sector, including M&A, counseling FinTech start-ups, developing compensation and profit-sharing schemes, and assisting entrepreneurs in maintaining, maximizing, and transferring their wealth. He was Apple's first country manager for China, as well as for Korea. He was director of Asia Pacific for Alcatel Data Networks and director of North American Corporate Development for Cable & Wireless.

Scott also holds a Chartered Financial Analyst (CFA) charter, the most recognized designation for investment professionals globally. He has previously held leadership positions in the Washington Association of Money Managers and the CFA Society of Japan.

Rating - Intermediate 
(Material presented will have technical elements requiring a working knowledge of the subject to make full use of the presentation.) 

CFA Societies Global Passport Program