Companion file

Raising a Real Estate Fund

A Practitioner’s Guide to Strategy, Track Record, Terms and Getting to First Close

Julian R. Sterling

One Excel workbook. Chapter 17 prints the most useful table in the book — 180 names screened down to eight commitments and a first close of 100,000,000 — and it has no dates in it. Everything else in the chapter is about time. This file runs the same funnel, at the same conversion rates, on a calendar. It is free. Nothing is gated behind a sign-up, and no email address is asked for.

• Appendix F · Chapters 15, 17, 18 and 20

  The raise as a queue

  The printed funnel does not obey the rule printed beside it. Half grant a first meeting, half produce a second, half enter diligence, half reach a soft circle, two-thirds convert. Applied to 180 names those five rules give 90, 45, 22.5, 11.25 and 7.5 — not 90, 40, 22, 12 and 8. Two of the five stages round the wrong way and the errors very nearly cancel, which is why nobody notices. But 7.5 commitments is 93,750,000 against a stated first close of 100,000,000. To close eight on the rules as worded, the screened list has to be 192 names, not 180.

  The eight investors do not arrive as eight investors. Run the same funnel on a calendar and they arrive as two lumps, because soft circles wait for quarterly committees: 37,500,000 closing in month 7.6 and 56,250,000 in month 11.3. The hundred million is never reached at all. Chapter 17 computes, to the unit, that a slip from month nine to month fifteen costs 1,950,000 — and the workbook reproduces that figure exactly. It is not the cost of a delay. It is the cost of the plan.

  The response to the start date is a cliff, not a slope. Beginning in week 19 through week 25 all close the same 93,750,000 by month twelve. Week 27 closes 81,250,000. Week 28 closes 75,000,000, and the first close jumps from month 6.5 to month 9.9, because the leading cohort misses a papers deadline by days and takes everything behind it along. A third of the money moves on a decision about which week in June to begin.

  The house does not survive its own first close. The chapter’s management company costs 200,000 a month; its 100,000,000 first close at 1.5 per cent pays 125,000 — 62.5 per cent of the burn. The capital that has to close before the fee covers the cost is 160,000,000. The partners fund 2,095,312 by month twelve and 4,082,812 by month thirty-six, and the house never turns cash-positive on the first close alone.

  Two rules the book never puts in the same sentence. Chapter 20 sets the first close at a quarter to a third of target; Appendix C computes break-even at full fund size. The fee at first close is charged on what has closed. A quarter-close covers the Appendix C budget only from a target of 485,714,286; a third-close only from 364,285,714. The book’s own 300,000,000 fund runs a 375,000 annual deficit, and that deficit is the committed partner capital chapter 20’s third test asks for — the number chapter 18 says a reviewer will call a thin runway.

  And the fix is not the one a founder reaches for. Two constraints bind: the list and the diary. Going from six sessions a week to twelve at 180 names changes nothing. Going from 180 names to 240 at the same six a week closes 112,500,000. Sixty more names is worth more than doubling the travel. Thirty-three checks.

  The_Raise_Timed.xlsx · XLSX · 110 KB

What to try first

Go to sheet 8 and read the second column downwards. Then change the start week on sheet 1 to 28 and watch sheet 4 rebuild: the leading cohort misses a papers deadline by days, waits a full quarter, and takes the whole raise with it. That single step is the chapter’s own sentence about the first of March, applied to the chapter’s own funnel. Then find the book’s cell on sheet 9 — 180 names, six a week. Move right along the row and nothing happens. Move down the column and the target is cleared.

What the arithmetic does not settle

It cannot tell you your own conversion rates, and those are the first inputs to replace. It cannot tell you whether a particular investor’s committee is monthly or quarterly — which is exactly why chapter 17 tells you to ask, in those words, when it sits and who writes the paper. And it cannot judge a strategy: a funnel that converts badly because the fund is wrong for the market looks identical, in this workbook, to one that converts badly because the list is too short. The chapter’s own test settles that one, and it is not arithmetic — if eleven investors decline for the same reason, that reason is the product.

Conventions used throughout

Amber fill	an input — you may edit these
Grey fill	a formula — do not overtype these
ASSUMPTION	an input the book does not state, each labelled with the reason
Checks sheet	thirty-three controls — five exist only to reproduce the book before disagreeing with it

Every figure is illustrative. The fund, the house and the investors are invented, as they are in the book. Every input is one the book states, except two session counts and three stage durations, which are labelled as deductions beside the sentence in the book they are deduced from.

Opening the file

The workbook opens in Microsoft Excel, LibreOffice Calc, Google Sheets and Numbers. It uses no macros and no add-ins, so nothing needs to be enabled or trusted. If your spreadsheet asks to update links on opening, decline — there are none.

Articles on this book

• Does a first close cover the management company's costs?A 100,000,000 first close at 1.5 per cent pays 125,000 a month against a 200,000 burn: the house loses 75,000 a month.
• Pricing StrategyA list price of 148.00, a pocket price of 112.51, and the nine deductions in between — with what one point of price is actually worth.

Also by Julian R. Sterling

The other books with companion files. The full list of titles is on the author page.

• Breaking Into European Defence ProcurementThe money and the instruments, the 35 per cent content test, and proposal economics.
• Closing the DealTwo defensible bridges 20.70 million apart, a peg worth 7.00 million, and the six choices that remove 6.60 of a 12.00 earn-out.
• CMBS and CRE CLOsWhere the loss actually lands, from appraisal reduction to realised severity, and what the B-piece is really being paid for.
• How to Read a Commercial LeaseThe three refinements chapter 19 names and never performs, and the renewal rate below which the mark-to-market is worth nothing.
• How to Read a Credit AgreementWhere the default actually comes from, the cure that costs 5.5 times the other, and the capacity nobody adds up.
• How to Read a Limited Partnership AgreementWhat the clawback actually collateralises, and why every dollar won on the tax clause lands in the uncollateralised column.
• How to Read a Private Funds Financial StatementsThe Harbourgate reporting pack, five worked cases, and rebuilding your own account.
• How to Read a Real Estate Loan AgreementThe cure ratio in closed form, the four-point window in which the cheap cure works, and the cure sized to the wrong threshold.
• Insurance Capital for Asset ManagersWhy the same fund costs two insurers different amounts, and what opacity costs a manager in euros.
• Logistics and Industrial Real EstateNet effective rent, the ageing asset, and the development letting decision.
• Office Real EstateA six per cent yield that returns 3.2 per cent once the re-letting cycle is paid for, and the headline-to-net-effective rent arithmetic.
• Operational Due Diligence in Private EquityThe rating model built and then broken, and why refining a rubric weakens it.
• Personal Finance for BeginnersWhat a minimum payment really does, and what the snowball and the emergency fund actually cost.
• Private Equity Investor RelationsWhat a fund has returned, read six ways — and the eleven-point gap between them.
• Private Equity Real EstateBoth worked waterfalls to the dollar, the two capital stacks, and the arithmetic of the promote made changeable.
• Private Markets PerformanceThirty-one of the thirty-three figures chapter 19 publishes reproduce exactly — and the two that do not are named rather than quietly adopted.
• Real Estate FinanceFour people look at one building and reach four numbers; the lender is whole only above 105,109,489, twelve per cent below today’s value rather than forty.
• Real Estate Financial ModelingProperty, development and fund models built line by line, and the modelling test worked end to end.
• Real Estate Fund ManagementThe waterfall of 6.11, the build-to-core of 8.7 and the proceeds gap, reproduced as live formulas rather than asserted.
• Real Estate Joint VenturesThe JV waterfall and promote, the complete venture, and failure to fund.
• Real Estate Transaction Due DiligenceWhat the diligence cost, which workstreams paid for themselves, and the investigation the book skips, priced.
• REIT Analysis and ValuationFFO of 532.0, AFFO of 381.0, net asset value and dividend safety — every figure a formula you can change.
• Retail Real EstateThe occupancy cost of every unit in a centre, the sixteen per cent of the rent roll no tenant can sustain, and the right-size-convert-or-hold decision priced.
• Sale and LeasebackA €179.5 million transaction end to end, with rent cover measured on the entity that actually signs the lease.
• Self-Storage Real EstateThe cohort engine behind a 590-unit store, and the rate increase on existing customers priced against the move-outs it causes.
• Senior Living and Healthcare Real EstateThe resident engine of a seventy-bed home, the payor mix, and a rota costed at the employer's real hourly rate.
• Significant Risk TransferThe bank's ceiling and the investor's floor derived independently, and the narrow band of prices at which both can say yes.
• Stock Market Investing for BeginnersWhat compounding and fees actually cost, with figures — and a calculator for your own.
• Student Housing Real EstateRevenue per available bed against the rate card, the letting campaign week by week, and the cost base of a 520-bed scheme.
• The AIFMD II HandbookThe reverse stress test computed, and the facility term that moves it more than any asset.
• The Asset-Based Finance HandbookThe borrowing base off a live loan tape, the Meridian transaction, and trigger design.
• The CBAM Compliance HandbookWhat 2027 really costs, how big the buffer should be, and the term the surrender formula counts twice.
• The Co-Investment PractitionerWhat dilution really costs, what a pay-to-play clause is worth, and how much to hold back.
• The Continuation Fund HandbookThe Thalia transaction, the bid funnel, and the fees behind the roll decision.
• The Data Center Development HandbookThe underwrite computed: the levered return the chapter never builds, and what a twelve-month slip costs.
• The Distressed Debt InvestorWhere the fulcrum security actually breaks, and what an 80-cent recovery is worth once composition and time are priced.
• The ESG Manager in Private EquityThe exit in equity and IRR, the line the book drops, and the half-turn nobody controls.
• The EU AML HandbookThe back book sized, and the month beyond which no headcount recovers a one-year window.
• The Evergreen Fund HandbookWhat the sleeve costs, and the headline IRR at which a closed-ended fund merely ties.
• The Family Office ProfessionalWhat an office costs, and the level of wealth at which building one starts to pay.
• The Fund Finance ProfessionalChapter 8 builds the reported-to-eligible NAV bridge; chapter 9 computes every ratio without it. Two points at every state — and what a subscription line does to the IRR.
• The Growth Equity InvestorWhat a pro rata cheque really costs, and the band where defending your ownership loses money.
• The Infrastructure Investment AnalystDebt sculpted to a coverage floor, and one asset valued twice to the last decimal.
• The Private Credit InvestorThe two coverage ratios are not measured on the same thing: the erosion is 47.7 per cent, not the 28.7 the headline implies.
• The Private Equity Fund Controller PlaybookThe book defines IRR, DPI, RVPI and TVPI, tells you to update them at the exit, and prints not one value. Computed: a 1.833× deal inside a fund at 0.892 TVPI.
• The Private Equity Operating PartnerThe value creation bridge built in full, and who actually made the return.
• The Private Equity Secondaries InvestorThe seller’s floor beside the buyer’s ceiling — and the zone that usually is not there.
• The Private Fund Compliance OfficerThe grey zone as basis points, a broken deal four ways, and how many items you must test.
• The Private Markets Limited PartnerWhat a co-investment programme really saves, and the loss rate that erases it.
• The Private Markets Valuation SpecialistThe book describes its illustrations without numbers on purpose. These files close the chain, with every step visible.
• The Private Wealth FundraiserThree peaks, years apart, and the signature that tells a forecast miss apart.
• The Real Estate Asset ManagerBusiness plans, leasing, and what deferring the work on a building actually costs.
• The Real Estate Debt InvestorThe margin against the return on capital, the floor priced, and what prepayment protection buys.
• The Real Estate Development ManagerThe residual appraisal, the worked scheme, land diligence and the risk register.
• The Real Estate Secondaries InvestorAn eighteen per cent discount to net asset value that is really 9.18 once the reported value is unsmoothed.
• The Venture Capital AssociateWhat defending a position costs, and how many companies a reserve pool actually defends.
• Financial Risk ManagementA fund inside every limit that cannot meet a redemption — and the number that decides it is the one with no currency attached.
• Business ValuationThree advisers land 26.8 per cent apart on one company, and the whole gap turns out to be 1.96 points of perpetual growth.
• Quantitative FinanceThree models agree to a quarter of one per cent about a number that one unobservable input moves a hundred and three times as much.
• Asset ManagementFour people quote four returns for one mandate, all correct and 2.7017 points apart — forty-eight times the manager’s net skill.
• Alternative InvestmentsA manager reports 13.29 per cent and the endowment earns 6.26 — both correct, and only a third of the advertised advantage arrives.
• Credit AnalysisFour defensible EBITDAs on one borrower give leverage from 3.19x to 6.47x — and the add-back argument is fifty times the covenant headroom.
• Venture CapitalOne company out of twenty-eight returns 56.7 per cent of the fund, and half the capital goes in after the decision — at half the return.
• Machine Learning for FinanceFive people quote the accuracy of one credit model, all five are right, and the number that decides how much money it makes is none of them.
• Commercial Real Estate InvestingThe equity earned 8.6647 per cent and the investor received exactly 8.0000 — the preferred return, and nothing above it.
• Mergers and AcquisitionsThe board paper says the deal creates 13,436,667 of value. The arithmetic says it destroys 17,530,855. Nobody is lying.
• DerivativesThe treasury report says the hedge cost 1,233,698. That is the interest differential, not a cost.
• Treasury ManagementFive cash balances for one company, all correct and 145,600,000 apart — and the revolver that is two-thirds of the liquidity leaves at a revenue fall of 8.4127 per cent.
• Financial Planning and AnalysisRevenue 3.0190 per cent above budget and operating profit 16.3209 per cent below it, in the same quarter, with every figure correctly stated.
• Energy TradingA position report that is 91.7031 per cent hedged and correctly computed, on a book that is short 2,542,000 MWh — and a margin call of 198,400,000 the next morning.
• Construction Cost ControlA contract sum of 26,301,102 became a final account of 29,153,363 on the building that was drawn — and 85.8 per cent of what was lost was knowable on the day it was signed.

These files accompany Raising a Real Estate Fund. The book is on Amazon.

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