Counterparty
Who assumes the obligations, in which country, and with what rights for the investor.
AI concept illustrationMGM Capital · Investor relationsDifferent structures.
Different structures.
Responsibilities to understand.
An overview of the main forms of participation in property development. Each transaction has its own terms.
Shareholder, creditor or instrument holder?
Participation in a real estate project can take different forms. The categories described here are not a catalogue of available offers: they help guide the initial discussion. The actual structure and its permissibility must be verified for each transaction.
01 · Equity
Participating in equity.
An equity interest gives the holder a stake in a company’s capital. Economic and governance rights depend on the class of interest, the articles of association and the applicable agreements.
Results depend on business performance and corporate decisions. Distributions are not guaranteed; dilution, loss of capital and difficulties selling the interest may arise.
Points to examine: the company invested in, use of funds, voting and information rights, costs, distributions, future capital increases and exit terms.
02 · Mezzanine
Financing with a defined repayment ranking.
Mezzanine refers to financing structures that generally sit between senior debt and equity. They may include subordination to other creditors and financial components linked to performance.
Contractually agreed remuneration does not eliminate the risk of non-payment. Security, the degree of subordination and recoverability depend on the actual structure; they must not be assumed.
Points to examine: the debtor, maturity, creditor ranking, any security, restrictions, payment terms and consequences of default.
03 · Convertibles
From debt to equity, under defined rules.
A convertible loan or bond may turn into an equity interest when the specified conditions are met. Conversion may be optional or mandatory, depending on the contract.
Before conversion, credit risks are relevant; afterwards, equity risks apply. The price, ratio and timing of conversion affect rights and potential dilution.
Points to examine: conversion events, company valuation, class of interests, maturity, repayment and rights before and after conversion.
Read the structure before the numbers.
Resources and risks
How capital is used, what costs and conflicts of interest exist, and which factors may affect the project.
Time and exit
When and on what terms an investment can be exited. Underlying real estate does not automatically make an interest liquid or guaranteed.
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An initial contact to learn about MGM and the process for further enquiries.
No commitment to invest.
General information for institutional and educational purposes, not an offer of financial instruments or a personalised recommendation. Investments involve risks, including the possible loss of all capital and restrictions on exiting an investment. Any transaction is subject to its specific documentation and applicable restrictions; requesting contact does not confer a right to access or subscribe.