April 30, 2024
How Investors are Paid: MLG’s Private Fund Return Structure
The series of MLG Private Funds provides investors with access to investment opportunities that aim to produce tax-advantaged cash flow and appreciation over time. The Funds focus on growing investors’ wealth, capital preservation and diversification within private real estate investment. Understanding how and when returns are sent to investors is perhaps one of the most important elements of any investment structure. Within the private markets, there are a myriad of different structures that may exist. These structures can be frequently misunderstood. Our Funds utilize a “European equity waterfall return structure”. This is specifically designed to be an investor friendly return structure. This demonstrates our firm’s commitment to investors and our confidence in our ability to execute. MLG Private Funds Return Structure: Our latest Fund, Private Fund VI, intends to underwrite potential investments to a target internal rate of return of between 11% and 15% (net of Fund expenses and fees), on a leveraged basis. Each of our funds utilizes a three-tiered return structure. 100% of available distributions are paid to investors as follows1; (Tier 1) 8% cumulative preferred return on invested equity (Tier 2) 100% return of original principal invested, after a full 8% cumulative preferred return is paid (Tier...
September 22, 2023
MLG Capital Sells Last Asset In Its First Diversified Fund
Close marks significant milestone for firm 11 years after strategic shift to real estate fund approach Firm’s latest real estate fund – Private Fund VI – approaches halfway point fundraising milestone Brookfield, Wis. (September 22, 2023) – MLG Capital announced a significant milestone for the firm with the sale of the last asset in MLG Private Fund LLC, “Fund I”, the first diversified fund in MLG’s series of real estate funds, established in 2012. Final distributions to investors, and formal closing, will occur in the coming quarters. Fund I raised more than $27 million in investor equity, and throughout its lifetime acquired and sold 13 properties and seven land investments, totaling more than 3,000 multifamily units and nearly 585,000 in commercial square footage. Acquisitions were primarily located in Wisconsin, Florida, Texas, Minnesota and Colorado. The closing of this transaction brought excellent returns for investors in Fund I and II. Overall, fund-level returns of 23.2% IRR and an equity multiple of 2.33X over the hold were achieved, as of 5/30/23.* “From my first meeting with MLG back in 2011, I felt a sense of confidence and trust in doing business with them,” said Norb W., one of the initial Private Fund...
May 2, 2022
MLG Capital Continues Its Successful Diversified Fund Series With Launch Of Sixth Private Real Estate Investment Fund
Brookfield, WI (May 2, 2022) MLG Capital today announced it has opened to investors its MLG Private Fund VI, which is the sixth in the firm’s series of private real estate investment funds. Fund VI will be MLG’s largest fund to date, with an equity raise goal of $400 million. The launch of Fund VI comes one month after the close of MLG Private Fund V, which set a record as the firm’s largest fund and fastest equity raise to date – capping off at $350 million and finishing 15 months ahead of schedule. “Our unique sourcing strategy for investment opportunities in a diversified fund structure has led to superior performance within the alternative private real estate space,” said Tim Wallen, Principal and CEO of MLG Capital. “We also have a major focus on creating significant income tax benefits and producing strong after-tax rates of return for our investors. We take great pride in the continued interest and trust from our investors, and we are excited about the opportunity to find smart real estate deals across the country for Fund VI.” Private Fund VI continues the firm’s focus on geographic, asset class and asset type diversification for investors. It targets 25-30+ investments located...
January 6, 2022
MLG Capital Closes Most Successful Year to Date with Acquisition, Equity Milestones and Launch of Innovative Charitable Initiative
Brookfield, WI (January 6, 2022) As it celebrates its 35th anniversary in January of 2022, MLG Capital – a national leader in diversified private commercial real estate investments - has closed its most successful year to date, exceeding $1 billion in CRE acquisitions. In addition to its acquisition milestones, in 2021 MLG Capital surpassed $1 billion in historically invested equity since its inception in 1987. “MLG has now historically invested in over $3.7 billion of transactions, which is the total of sold assets and the estimated current value of current investments. This figure represents approximately 30,000,000 commercial square feet of assets, inclusive of nearly 25,000 multifamily apartment units across 19 states,” said David Binder, Vice President of MLG Capital. 2021 was a significant year for a firm that has seen exponential growth in the last decade. The Wisconsin-based firm acquired more than 7 million square feet of property, inclusive of nearly 6,900 apartment units across 37 multifamily properties and five commercial assets last year. Properties were acquired in 10 states across the Midwest, Southeast, South Central and Southwest regions. Much of this rapid growth and success can be attributed to the firm’s diversified fund strategies, which originally launched in 2012 and provides investors the...
October 21, 2021
15 Questions to Ask Before Investing Your Money: Part 3
I’m sure you’ve heard before that real estate is a relationship business. This is not only true when it comes to finding good deals, but it’s also true for managers working with new and prospective investors. Strategy and structure are critical for the performance of an investment in private real estate, but the success of a firm can give a manager a leg up on its competitors. While past returns are not indicative of future results, a track record is an important factor to look for in a real estate investment manager. Here are some questions to help guide your conversations when vetting a private real estate firm. How Has the Firm Weathered Market Cycles? In the past 30 years, the commercial real estate space has been through several major downturns that resulted in reduced demand for real property: “Savings and Loan Crisis” of the late 1980s, the “Dot Com Bust” and the resultant recession of the early 2000s, “The Great Recession” in 2008 and, most recently, the impact of the coronavirus pandemic in 2020. A firm that managed through these cycles and remained in business throughout these downturns, and subsequent recoveries, in the real estate market may indicate to you that it their...
October 4, 2021
Private Fund V on Pace to Close Ahead of Schedule; Nearly Half Raised in Nine Months
Brookfield, Wis. (October 4, 2021) MLG Capital today announced that it has raised more than $140 million in equity for its latest diversified Private Real Estate Fund, MLG Private Fund V, nearing one-half of the $300 million equity raise goal for the fund. Private Fund V opened to investors in January 2021 and allows investors to contribute through July of 2023, or upon reaching its equity raise goal, whichever is first. The fund launched on the heels of MLG’s most successful fundraise to-date, Private Fund IV, which raised $250 million and closed to new investors five months ahead of schedule. Fund V has already acquired eight new properties since launch, totaling over 2,100,000 square feet of property and encompassing 1,990 multifamily apartment units across seven markets. “We have a busy fall ahead of us,” said David Binder, VP of MLG Capital. “There are several new acquisitions that we’re targeting to close by year-end for Fund V, totaling over $250 million in transaction volume. We’ve continued to cast a wide net across the country and are finding the properties we are looking for. On top of deal flow, our family of investors, now spread across all 50 states, continues to trust us to...
May 4, 2021
Two Investment Options: MLG Capital Private Fund and MLG Dividend Fund
Author info Everyone loves options in life and when you invest in our Private Real Estate funds, you can choose from two Fund options to best suit your personal objectives. When Private Fund IV launched in 2018, we introduced a new concept, “the Dividend Fund” as we’ve called them, in conjunction with our historic fund offerings. We’re excited to continue offering this dual structure for investors in our latest funds. While both fund options invest in the same underlying assets across each Fund, both fund options present different tax implications to investors. Let’s take a deeper dive. Why two fund options? One of the primary reasons we created the Dividend Fund structure was to better accommodate tax-advantaged accounts (i.e., IRAs, 401(k)s, etc.). Without this structure, investors using these types of accounts could face unnecessary tax due to Unrelated Business Taxable Income. UBTI is generally incurred by tax-exempt investors when participating in private real estate funds (in our case) due to the fund utilizing leverage on fund assets. The Dividend Fund structure aims to eliminate the risk of UBTI for investors using tax-advantaged accounts. What’s the same? Both fund options invest in the same assets regardless of which option you...
January 26, 2021
MLG Capital Launches its Fifth and Largest Private Real Estate Investment Fund
Brookfield, Wis. (January 25, 2021) MLG Capital today announced it has opened to investors its MLG Private Fund V, which is the fifth in series of private real estate investment funds, with an equity raise goal of $300 million. The launch of Fund V comes on the heels of MLG closing its successful MLG Private Fund IV, which raised $250 million and closed five months ahead of schedule. “We have seen continued strong interest and trust from our investor family,” said Tim Wallen, Principal and CEO of MLG Capital. “We are excited about the market opportunities that exist and are focused on continuing to find smart real estate deals across the country. We define “smart” deals as deals with believable and achievable assumptions.” Fund V continues MLG Capital’s focus on geographic, asset class and asset type diversification for investors. For each of its private real estate funds, MLG Capital targets 25 to 30+ investments located in markets and locations where the company can grow the operating income of the property. It does not set a specific target allocation to any asset class. Instead, there is a focus on investing in “smart” deals versus promising specific asset class or geography diversification. Fund V targets tax-efficient...