Syndication - Becoming a Partner

[Christopher Lombardi]

Ive been asked to become part of a GP in a syndication by providing my balance sheet in order to get the acquisition loan.  Does anyone know what a fair piece of the equity would be for providing your balance sheet to get a deal done?

[Shafi Noss]

Hi Christopher, assuming you are coming on as a KP on a non-recourse commercial loan with standard carveouts, the going rate seems to be 5-10% of the GP. Maybe closer to 5% for just the balance sheet and adjust upward for any capital or experience you bring, the risk of the project, etc.

Non-recourse carveouts can also get big enough that the line between recourse and non-recourse is blurred so that's also a factor to pay attention to.