Alignment is the sum of capital at risk, fee load, and waterfall mechanics—not a slogan on a slide deck.
At a glance
- Co-investment: Sponsor capital alongside LPs—verify amount, timing, and pari passu terms in writing for each offering.
- Fees & promote: Acquisition, asset management, disposition, and promote can materially change net investor outcomes versus headline pref and splits.
- Waterfall: Economic ordering determines who earns what after NOI converts to distributable cash—read waterfall basics.
- Stoneforge: We emphasize targeted sponsor co-investment and transparency framing on investment structure; specifics vary by deal.
Co-investment (“skin in the game”)
Sponsors sometimes commit their own capital alongside LPs to signal confidence and reduce agency concerns. Amounts, timing, and whether co-investment pari passu with investors differ by offering—verify in writing.
Fees and promote
Acquisition fees, asset management fees, disposition fees, and promote structures can offset pure co-investment optics. A fee-light sponsor with weak underwriting is not preferable to a fee-transparent sponsor with institutional process—investors should model net outcomes under conservative assumptions.
Stoneforge philosophy
We emphasize sponsor co-investment targets and clear waterfall framing as described on why Stoneforge and investment structure. Actual commitments appear only in offering-specific documents.
Agency risk and why waterfalls matter
Even with meaningful co-investment, sponsors manage conflicts: asset-management breadth, disposition timing, and refinance incentives can diverge from passive LP preferences. Waterfall design—preferred return tiering, catch-up, and promote crystallization—defines how those incentives translate into dollars. Compare structures across sponsors using executed documents, not marketing summaries; pair with preferred return mechanics when evaluating pref language.
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Past performance does not guarantee future results. This page is general education only.