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FinaTech
Solutions
Higher Returns for the GP
We Help You Build a Lasting AUM Legacy
With a 2 & 20 structure, GPs earn 5.5% per year on AUM when delivering a 14% return to their LPs. All three of the solutions showcased on this page can boost a GP's return to 7% per year, while increasing their carried interest to over 40%. See Table 1, 2. The Revolver can even increase a GP's return by an additional 3% per year. See Table.
Higher Returns for GPs
It is equity—not debt—that represents a GP's highest cost of capital. LPs traditionally earn 80% of a fund’s profits. They need a high carry because they incur substantial risk investing under conventional methods: their investments are illiquid, locked up for ten years or more, and usually pledged before a fund’s portfolio assets have been secured.
The three solutions illustrated below fundamentally change these dynamics by sequencing a fund’s capitalization, shortening investment timeframes and utilizing changing strategies as a fund matures. By doing so, GPs can increase their return on AUM while appealing to a broader spectrum of investors. We can help you design and patent your own proprietary version of any one of these solutions.
The Enhancer
FinaTech’s Enhancer solution employs signature-guaranteed credit enhancement to launch funds quickly—without reliance on LPs. It can be used to seed a fund and build its portfolio before offering equity interests, or to bypass the need for LPs altogether.
The Double Dip
FinaTech’s Double Dip solution uses collateralized credit enhancement to launch funds without LPs and to recapitalize maturing funds. Like the Enhancer, it provides GPs with faster capitalization and greater flexibility, but applies to a broader universe of investors—including corporate treasuries, sovereign wealth funds, and family offices.
The Revolver
The Revolver is an investment vehicle built on FinaTech’s Double Dip solution that is designed to meet a GP’s capitalization needs year after year.
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