REO Capital - Versus - Third Party Marketers
Online, November 19, 2012 (Newswire.com) - REO Capital - Versus - Third Party Marketers
Based in Detroit Michigan, REO Capital, LLC is a retained Private Equity Consulting & Capital Raising firm for Hedge funds and Private Equity Funds. REO Capital provides Capital Raises, to established and emerging, Hedge Funds and Private Equity Funds. REO Capital works with funds globally who have at least a one year track record. REO Capital carefully select the projects that REO Capital works on so that REO Capital can dedicate the proper time and resources necessary to complete the capital raising.
Third Party Marketers may take on 70 to 100 projects per year unable to allocate the needed resources to complete these projects. Third Party Marketing Firms typically charge 20% Fee of the management fees and 20% of the performance fees received by the fund and an additional Success Fee of anywhere from 2% to 10% of the capital raise from the General Partners. REO Capital's cost analysis found that on an average Capital Raise of $100 Million the Fund will pay a total cost of approximately $5.9 Million in Fees for the Third Party Marketer versus REO Capital, LLC a Capital Introduction Retained Firm's total costs of about $2 Million. Third Party Marketers only work on the projects that pay the best. REO Capital is not a Private Placement Agent or a Third Party Marketer and REO Capital does not prioritize our projects like that.
First of all, when it comes to Capital Raising for any type of Fund there are certain risks that both parties have to share! There is Legal Risks involved, there is Expense Risks, there is Lost Revenue Risks, and both parties have to have "Skin in the Game" and share those risks equally. The way Fund Managers share that risk is to pay a Monthly Retainer for their Capital Raise and then they have a vested interest in the success of the Capital Raise! Our firm has designed a "Refund Contract" where the Fund Managers pays a Retainer on a monthly basis for the Capital Raise and REO Capital charges a 2% Success Fee and then at the completion of the Capital Raise REO Capital, Refunds the entire Retainer Fee of some $500,000 back to the Fund Manager. This shows us the Fund Manager is serious about a Capital Raise! Otherwise the Fund Manager & General Partners are getting the Capital Raise for FREE. The average Capital Raise of $100 Million takes about 24 months to complete. REO Capital will not cover all the risks & expenses alone during that 24 month period! REO Capital has expenses of rent, automotive, & employee salaries etc... just like every other firm and will not go 24 months without paying on all our expenses!
However, keep in mind that REO Capital's firm's fees are about 70% less than a Third Party Marketing firm that charges a Success Fee and 40% less than other firms that charge a Retainer. There are no other Retained firms out there that will "Refund" all your Retainer Fees so that the Capital Raise is based on a Success Fee! Also REO Capital will "re-invests" part of REO Capital's Success Fee back into the funds we Raise Capital for so that we have a vested interest in the funds. Finally, REO Capital has a Non- Performance Clause in our Retainer Contract so there is no 24 month requirement on our Contract.
REO Capital, LLC is a boutique Capital Introduction firm our firm works for managers that have a niche in their chosen strategy, that have a good past performance and who we believe have an offering that will be attractive to our clients. REO Capital will often work with the General Partners and the fund to also offer fund progress updates and consultation services throughout the life of the investment. The role of REO Capital, LLC is to Raise Capital, provide research data for the Capital Raise and serve as a bridge between Fund Managers and potential institutional investors.
REO Capital, LLC can offer competitive & comparative financial analysis data from Boston Analytics and competitive fee structures for Emerging Managers of Hedge Funds, & Private Equity Funds as well as General Partners & Fund Managers of more experienced Funds.
REO Capital is a unique Capital Introduction firm, REO Capital has an Innovative Refund Fee Structure, REO Capital will Co -Invest a portion of our Success Fees with the Funds we Raise Capital for, to prove REO Capital has a vested interest in the capital raise & REO Capital has no specific time frame for a Capital Raise with our Retainer Contract REO Capital uses a Non -Performance Clause instead! The answer is simple, REO Capital is the Clear Choice for all your research & capital raising needs!
John Denes
CEO
REO Capital, LLC
Detroit, MI USA
London, England UK
941-870-5586
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Tags: capital raising, hedge funds, private equity funds, reocapitalllc, research