Individual Deals

A sidecar investment is an opportunity for investors to co-invest alongside a private real estate fund in a specific asset that exceeds the fund’s allocation for a single property. The fund manager vets the asset, and interested investors are invited to participate directly, sharing in the potential profits.

The concept was popularized by Harvard economist Richard Zeckhauser, who used the motorcycle sidecar metaphor. He emphasized the importance of trusting the “driver”—the skilled manager sourcing and evaluating the investment.

Origin offers sidecar investments for select acquisitions when asset allocations cannot cover the full purchase amount. This ensures strong deals can still be executed while providing additional opportunities for current fund investors.

Fund managers offer sidecar investments when they find a great asset that costs more than the fund’s property allocation allows. Instead of passing on the deal, they create a sidecar vehicle for investors to co-invest and cover the remaining equity needed.

Investors benefit from:

• The fund manager’s expertise and due diligence.
• Alignment with the fund’s investment philosophy.
• Minimal additional research or effort required.
• Reduced legal and accounting costs borne by the sponsor.
• Exclusive access to vetted opportunities.

For example, if a property costs $25 million and the fund can only allocate $15 million, the fund uses its existing capital commitments for $15 million and creates a sidecar vehicle to raise the remaining $10 million from interested fund investors.

Sidecar investments are tied to a fund’s investment in a property, with investors co-investing directly alongside the fund. Syndications, on the other hand, involve co-investments between a sponsor and investors, and are not necessarily linked to an existing fund.

Sidecar investments are typically offered to existing investors in the fund on a first-come, first-served basis or proportional to their investment in the fund. This ensures the opportunity is allocated fairly among fund participants.

If there is a current sidecar opportunity available, you can navigate to [insert link or platform here] for details and to participate.

Conflicts can arise if fund managers bring in outside investors who are not part of the main fund or offer different terms to co-investors. To avoid this, Origin only offers sidecar investments to current fund investors, ensuring alignment and fairness.