RD Advisors Real Estate Debt Fund
Strategy: Real Estate Credit
Geography: USA, Massachusetts
Net Total Return: 10-12% annually
Net Distribution: 8% annually, paid quarterly
Fund Life: perpetual - Open Ended
SPV closing deadline: 31 January 2023
Summary
RD Advisors is a real estate lender based out of Boston, USA, led by Sean Kelly-Rand, ex Madison Realty and Lehman Brothers.
The team have executed >250 loans worth >$200m in principal since 2017 with zero losses, with an average loan to value of 59% and interest rate of 10.5%. The loans are structured as senior and are short term with a average tenure of 11.9 months.
84% of all loans have been to residential properties, with only 4% exposure to commercial property and the rest mixed use. 82% of the loans were to properties in Massachusetts, with the rest to neighbouring states which the team know well.
Highlights
Improved opportunity set with bank retrenchment: banks stepping back from lending have created more dealflow for the team and less competition. The team could double its deployment if it had sufficient funding to do so. This has also resulted in the quality of borrowers improving and higher rates being able to be charged.
Consistent returns: the fund has produced an annualised return of 9.5% since inception in April 2017 with low volatility. Close to 8% of this return was paid out in income, giving investors a high yield product with senior level risk.
Zero loan defaults: The fund has never lost money on any loan, even during COVID, demonstrating these returns to be even stronger from a risk-return perspective.
Market leaders in their niche: the team have an excellent local reputation for swift loan execution and hold regular events for the local real estate community, culminating in increased dealflow.
Strong sentiment from existing investors: the fund has only had 2 investors redeem since inception, with those being partial redemptions, which is a positive indicator of existing investors being satisfied with the fund's performance.
Top tier service providers: Goodwin is the fund's legal counsel and Apex is the fund's administrator, both globally recognised firms.
Historical Fund Performance
Fund Documentation
Below you will find Notion Capital's Key Information Document (KID), Private Placement Memorandum (PPM), Limited Partnership Agreement (LPA). Please read through these and one you are done, proceed to the next section to generate the application form for our SPV.
Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you are unlikely to be protected if something goes wrong. Take 2 mins to learn more.
Key Terms
Key Fund Terms
Legal Name: RD Advisors Real Estate Debt II LP
Jurisdiction and Fund Structure: Delaware Limited Partnership
Style: Real estate loans
Management Fee: 1.5%
Carried Interest (profit share/performance fee to the fund manager): 15%
GP Commitment: >50%
Fund Term / Life: 5 years
Mara SPV / Feeder Terms
Legal entity: UK Nominee Ltd, also referred to as a "Bare Trust"
One off entry fee and establishment expenses: investors pay x% of committed capital
All in ongoing fees and expenses: annual fee of 0.3% based on committed capital
Tax Status: Tax Transparent- no tax at the entity level but you will be charged local tax based on your jurisdiction
Capital Call / funding schedule:
provide the following as a % of your commitment as per the following schedule:
-
2023: 100% of your commitment
Prepare your documents for KYC
We utilise SumSub, a certified KYC provider to help process your documentation to verify your identity and pass AML checks. You can upload your documents via their portal, which is accessible by scanning the below QR code or by clicking this link:
You can mix and match how you upload documents and your progress will be saved. For example, you can scan the above QR code on your phone to take a picture of your ID and click the above link on your computer to upload your proof of address.
Check your required documents
1. Passport / ID and Proof of address (utility bill, bank statement, mortgage statement, dated within 3 months)
2. All documents need to be certified by a lawyer, notary or accountant in your local jurisdiction. Important that certification is done by a digital signature, otherwise original documents need to be posted.
Should you face any difficulties with uploading the documents onto SumSub, feel free to share them to client.services@marainvest.com instead
Sign up and invest now
Click one of the following forms to generate the appropriate Application Form, whether you are investing in your own name or via a personal investment vehicle/on behalf of a corporate. Please also read the Nominee Agreement (for reference only).
Our client services team is on hand to answer any questions, get in touch at sasha.batica@marainvest.com or book a time to chat with us
Any questions
Frequently asked questions
Mara Invest Limited is an appointed representative of Talbot Capital Limited, which is authorised and regulated by the Financial Conduct Authority. Our profile on the FCA
register can be found here. Mara Nominees Limited is a separate dormant administrative entity that will hold the shares of investors.We can accept any investor jurisdiction that your fund has permissions to accept.
The Nominee is merely a legal entity to hold interests in your Fund on behalf of the investor, with no discretionary investment decisions being made for investors by us.
As such, investors are making the decisions themselves to invest in the Master Fund and are not advised to do so by any investment manager. Additionally, the Nominee
does not have an Investment Policy statement or an Investment Management Agreement between investors. All these factors deem the Nominee not to be an AIF.Mara making a single commitment to the Fund on behalf of multiple underlying investors. This would result in your Fund’s administrator dealing with a single named LP,
and providing a single capital account statement etc.We conduct KYC on all investors. We are happy to share any KYC/AML information on each investor to save you doing the work, but other fund manager clients have
been happy with us signing a “letter of comfort” attesting to us doing these checks appropriately and providing aggregated information on underlying investors.Our SPV also takes care of FATCA reporting on each underlying investor, so our SPVs can be an effective tool for you to effectively outsource this burdensome work to
us to save you time and money.We work with you to determine the appropriate capital call schedule for our investors in line with your forecasted deployment schedule. We may call 100% of investor
capital at day 1 if you plan to invest over 1-2 years, or we may instead call 25% at day 1 if you have a steady deployment pace over 4 years.If we have a drawdown structure, a side letter will be required to protect other investors in our SPV from any liabilities brought about by any one defaulting investor in the
SPV. Typical LPAs treat the whole SPV entity as a defaulting investor even if only one investor happens to default. We have templated for this to share with your legal
team.
The Team
Sean Kelly-Rand
Managing Partner
Sean brings two decades of real estate finance, banking, and investment experience with top-tier private equity firms and banks to RD Advisors. Alongside his professional career, in 2010 he started a family investment firm to acquire, renovate, develop, and manage small investment properties in the Boston area. Mikhail Gurevich was one of the original investors.
Sean started his real estate career with Lehman Brothers, structuring billions of dollars in transactions, and later took roles in debt restructuring and advisory, eventually running the London office for Madison International, a major RE private equity firm.
Mikhail Gurevich
Managing Partner
Mikhail brings a decade and a half of investment, technology, and operational experience to RD Advisors. In 2011 he founded Dominion Capital (“DC”), a multi-strategy investment firm, which laid the foundation for RD Advisors. Besides real estate debt, DC specializes in Structured Credit, Venture Capital, and broader Capital Markets investments.
Before starting DC, Mikhail founded and was CTO of two startups, ClickFacts, an online analytics and solutions company in 2005, and ZepInvest, a financial data research aggregator in 2007.