Traditional real estate investment entities such as pension funds, REITs, investment banks, and most opportunity funds, must typically deploy large amounts of capital. Yet, relatively few real estate assets are large enough to meet their criteria. The result is a competitive and efficient market. The "winners" are the ones with the lowest cost of capital who can pay the highest price in a bidding process. Furthermore, as the majority of investors in such entities are non-taxable, the investment strategies are not usually optimized for tax efficiency.
HG Capital's strategy is designed specifically to avoid competing with traditional funds for large real estate assets. Instead, HG Capital invests in small and mid-sized assets which comprise the vast majority of all real estate assets in the U.S. There is relatively little organized, professionally managed capital available to invest in such properties, and the market is inefficient.
By leveraging our relationships with experienced, entrepreneurial operating partners and their local market expertise, HG Capital frequently acquires “off-market” assets that can be actively managed and improved in order to generate attractive risk adjusted and highly tax efficient returns.
HG Capital's depth of experience in multiple real estate sectors has also enabled the firm to implement a dynamic diversification strategy. Specifically, the firm's portfolio strategy is constructed to take advantage of economic and real estate cycles while being diversified across product types, time, and geography.