Frequently Asked Questions

Category

  • The Opportunity
  • Investment Strategy & Philosophy
  • Investment Terms
What opportunity does MG Capital offer to its investors?

MG Capital’s unique investment strategy and platform enable individuals and families globally to hold an equity interest in recurring rental income streams derived from hundreds of MG-AAA rated, fair-market corporate tenants, through a passive real estate investment that is 100% collateralized by debt-free, Class A residential luxury properties. Investors also benefit from our Capital Protection Provision, which mitigates the risk of investment loss.1

The Fund IV investment is open to individuals, families and institutions from all over the world (in the US, individuals must be accredited investors). Our current global investor community includes high net worth individuals and entities, family offices and trusts, and individual retirement plans. Our investors originate from across the U.S., South America, Europe, the Middle East, India and broader Asia. 30% of investors are US-based and 70% are non-US based.

What is MG Capital's investment strategy?

Fourth-generation proprietary analytics form the foundation of MG Capital’s data-driven investment strategy. We analyze, select and manage portfolio investments based on 160 quantitative and qualitative criteria, with the objective of insulating investment decisions from emotional bias and personal preferences. Our disciplined adherence to a data-driven investment approach has historically enabled us to minimize risk to investor’s principal and produce strong risk-adjusted returns that are uncorrelated to broader markets. In addition, our vertically integrated platform enables MG Capital to realize scale efficiencies by managing all portfolio transactions and operations directly and internally (without third-party involvement), including all property acquisitions, corporate tenant partnerships, property management operations, state-regulated property title insurance policies, mandatory tenant liability insurance policies and portfolio exit syndications.

MG Capital utilizes its deep asset selection expertise with the primary objective of preserving principal and producing strong risk-adjusted returns, while following a debt-free investment strategy.

MG Capital believes its debt-free strategy mitigates risk to investor’s principal as it (i) prioritizes distributions to investors over debt service and (ii) maximizes the firm’s control over investment decisions, which enhances our ability to timely exit portfolio investments in advance of anticipated market movements.

What are the mechanics of our Capital Protection Provision?

The mechanics of our Capital Protection Provision1 can be summarized as follows:

  1. MG Capital is 100% debt-free. This means our Funds do not use leverage and all of our portfolio properties are free from mortgages. The residential portfolio properties acquired by the Fund, (each of which our investors hold a pro-rata interest in) serve as collateral for the Capital Protection Provision1 that mitigates the risk of investment loss.
  2. Strong cash flow from more than 215 high-quality, long-term corporate tenant partnerships with non-cancelable, multi-year lease agreements that include built-in rent escalations ranging between 4-10% per annum.
  3. The General Partner agrees that if, as of the completion of the winding up of the Partnership, the sum of the cumulative distributions of Rental Proceeds made to the Investor plus the cumulative distributions of Portfolio Investment Distributions made to the Investor is less than the aggregate amount of the Investor’s Net Capital Contributions that were used to make Portfolio Investments then the General Partner shall be obligated to promptly pay to the Investor, directly or indirectly via payment to the Partnership and then from the Partnership to the Investor, an amount equal to the Investor’s Net Invested Capital Shortfall.

Yes, investors can invest in the Fund through their retirements accounts. MG Capital collaborates with multiple custodians to facilitate investments from self-directed IRA’s.

Net proceeds from rental income, if any, will be distributed annually to investors. The initial annual dividend distribution for Fund IV is currently anticipated to occur in 2018, once the Fund has recorded a full year of performance since its inception.

The Fund is scheduled to report its first year of performance in 2018 and is expected to be exited in full through a syndication to institutional investors in 2023.

MG Capital’s team commitment will be equal to at least 2% of each investor’s capital commitment. As a result, the team commitment grows each time an investor makes a new allocation. To date, MG Capital’s aggregate team commitment to prior fund offerings totaled approximately $22 million.

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