How to Choose the Right Fund

When you invest in highly complicated asset classes, there’s less competition, but there is also more room for fatal error.

Maximizing returns comes down to execution. Execution is where value is created. Deal sourcing and market insights are not enough. What is their leasing strategy? What is their track record?

How do they mitigate risk? What do they know that the competition does not?

These are the questions that separate top-performing funds from the rest. In an environment where capital is abundant but reliable execution is rare, choosing the right fund isn’t just important—it’s everything. Here’s how you do it:

1. Study the Team’s Track Record

This is your first line of defense. Look for:

• Assets they’ve successfully exited (not just acquired)
• Experience and strategic partnerships in the target markets (not just trendy market research)
• Skin in the game (how much of their own time and capital is invested?)

A fund manager with a stellar resume but no history of returning capital to investors is just that—a resume.

2. Dig Into the Strategy—Not Just the Marketing

Every fund will say they focus on “value-add” or “cash-flowing” deals. That’s not enough. Ask:

• What is their specific advantage in the markets they target?
• How do they underwrite risk differently than their peers?
• What is their exit strategy for different economic scenarios?
• Do they specialize in one asset class or chase trends?

If the strategy sounds like a template, they probably do not have the knowledge and experience to successfully see your investment through to a successful exit.

3. Look at How They Create Value

The best operators don’t rely on the market to generate returns—they manufacture them through execution:

• Are they experts in leasing strategy, repositioning, or capex deployment?
• Do they have deep broker networks and off-market access?
• How do they control costs and optimize tenant retention?

Execution is what separates a 6% IRR from a 14% IRR. You want a team that can force appreciation through real operational excellence.

4. Review the Fund Structure and Alignment

Structure reveals incentives. A few key areas to review:

• Preferred return: Do you get paid before they do?
• Waterfall splits: How is profit shared after targets are hit?
• Fees: Are they able to cover their costs with the management fees or will this be a side project for them?
• Co-investment: Are the GPs investing alongside you?

The right structure aligns everyone’s incentives toward one goal: outperformance.