Working Papers

Working papers from Woodfine Capital Projects Inc. All papers carry CC BY 4.0 licences. Results are preliminary and subject to revision. Forward-looking statements reflect current expectations; actual outcomes may differ materially.

A Fixed Fee on Capital Raised, Not on Value

Why the base a fee is calculated on changes an advisor's incentive more than the rate does

Our thesis is that the argument about investment fees is usually held at the wrong end. Investors and their advisors argue about the rate — one per cent, two per cent — and rarely about the base the rate is applied to, which is where the incentive actually lives.

Working Paper WCP-012 · v0.1.0 · CC-BY-4.0

Financing the Building From the Lease, Not the Project

Equity first with no construction loan, then debt sized against income already earned

Our thesis is that the order of the money matters more than the cost of it. Conventional development borrows against a projected project cost before anything is built and repays from income that does not yet exist.

Working Paper WCP-013 · v0.1.0 · CC-BY-4.0

Transferable Is Not Liquid

What a public, non-listed unit actually gives its holder — and where this one stands today

Our thesis is that the most expensive mistake an investor can make about a private investment is to hear "transferable" and understand "liquid." They are different properties answering different questions. Transferable asks whether the holder needs someone's discretionary permission to sell.

Working Paper WCP-014 · v0.1.0 · CC-BY-4.0

The Multiple, Not the Slope

A rate of return measures how fast capital came back; the multiple measures how much of it did

Our thesis is that the standard headline figure for private investments measures the wrong thing. An internal rate of return rewards how quickly capital comes back, not how much of it ultimately does.

Working Paper WCP-015 · v0.1.0 · CC-BY-4.0

One Rulebook, Four Statutes

Universal Governing Bylaws across four national vehicles — and the places where the approximation fractures

Our thesis is that the right way to operate the same investment in four countries is not to invent one cross-border vehicle that no local regulator recognises, but to use each country's own familiar flow-through form and lay one identical set of governing provisions — the Universal Governing Bylaws — on top of it. That gives a Canadian limited partnership, a Delaware limited partnership, a Spanish listed real-estate company and a Mexican real-estate trust approximately the same investor protections: capital confined to a defined category of qualified investment, a prohibition on capitalised interest, a prohibition on any fee calculated by reference to net asset value, a seventy-five per cent supermajority to change the rules with a defined list of changes no vote can reach at all, a right of first refusal for existing equity holders over the vehicle's own debt, a minimum distribution floor, and developer profit held in escrow until investors recover the whole of their contributed capital.

Working Paper WCP-016 · v0.1.0 · CC-BY-4.0