Recapitalizations are no longer a way for veteran real estate managers to move the odds and ends left over in their funds into new sidecar funds. Now, newer managers are increasingly spinning off majority stakes in their portfolios or individual properties to a growing number of secondary market managers.
Such deals can be a lifetime for newer managers, providing them with a big exit and an instant track record to use to raise a new fund. This option is especially welcomed by emerging real estate managers struggling to raise capital from asset owners that prefer to invest with managers they already know.