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Frequently Asked Questions About Covenant Capital Group and Private Real Estate Funds: 1. What is Covenant Capital Group? Covenant Capital Group is a private real estate investment firm with more than $350 million of equity under management and investments of over $1 billion. Covenant employs a focused and disciplined investment approach. Covenant targets value-add investments in Apartment Communities 2. Who owns Covenant Capital Group? Covenant is a private limited liability company, which means that is owned by a group of individuals with the majority in interest held by Govan D. White and Frederic A. Scarola, the Managing Partners. 3. How is the firm structured? Covenant, with twelve employees, is based in Nashville, Tennessee. Day to day management of the organization is conducted by its two Co-founders and Managing Partners, Govan D. White and Frederic A. Scarola. One of the reasons Covenant can manage $350 million with a small staff to leverage existing relationships in the property management business. Covenant has chosen to not be in the property management business. 4. Is Covenant Capital Group a Property Manager? At its founding, Covenant made a strategic decision to not be in the property management business. We believe that the property management business is a distinct and different business from the investment management business. In order to avoid any conflicts of interest with our investors and owner/partners, Covenant is not in the property management business. However, we do manage the counstruction and renovation of all fund-owned assets. 5. What do your advisory boards do? Who sits on the boards? Covenant has multiple advisory boards that provide insight and knowledge to our investment professionals regarding the management of the Covenant Funds. The Board members come primarily from the business community. 6. What size investments do you make? We typically invest between $1 million and $10 million in any single company, but have invested larger amounts and would significantly increase this amount for portfolio transactions. 7. What is your investment horizon? We invest in properties with the expectation that we will own the asset for five to seven years, but expect to begin receiving capital back as early as year three. 8. How does your firm add value to properties? We add value through intensive asset management, visiting the properties frequently, tracking unit availability, being sensitive to market conditions (rent concessions, specials, etc.), managing and controlling the renovation process to ensure the work being done is bringing revenue to the property. We look at approximately 20 properties a week for acquisition and are extremely knowledgeable about our target markets. We monitor the financial performance of every property on a monthly basis and compare them to our overall portfolio of assets. We also structure transactions with the Joint Venture Partner with very clear goals and objectives. 9. Why do you feel you have an advantage in deal sourcing? We have a history of closing over $3 billion of transactions with sellers in our markets. We maintain a proprietary database of over 10,000 owners of apartments in the United States, which provides us with a significant advantage in the acquisition process. We select experienced local or regional owners and managers as property managers for our assets. |