Matthew Fuller is the chief investment officer of Participant Capital and leads its Investment Committee. He is responsible for executing the company’s equity and credit investment strategies.
Russ Alan Prince: You were recently named chief investment officer of Participant Capital. Tell us a little about your new role.
Matthew Fuller: As Participant Capital’s first CIO, I look forward to expanding the firm’s investment strategies and LP investor base and adding to our talented investments team. Participant’s 12-year-old investment platform weathered the Covid turbulence with ease and is well-positioned to take advantage of pricing dislocations in the market, primarily in the residential, hospitality, and net lease sectors.
As part of my role, I will continue to grow Participant Capital’s partnership with Royal Palm Companies (RPC) and other first-rate development projects, including advancing our global real estate offerings and diversifying the projects we invest in. I will also focus on widening Participant’s reach to a broader audience of global wealth advisors and their clients to raise capital via the firm’s US, Luxembourg, and Cayman Funds.
A top priority of mine is Participant’s Sun Belt Multifamily Development Fund 1. This is Participant’s fourth Fund, but its first focused specifically on multifamily assets. The goal of the fund is to capitalize on the tremendous opportunity we see in new build-to-rent multifamily projects in Florida, especially central Florida, resulting from continued population migration and vast employment opportunities.
Prince: How does the impact of the high-interest rate environment on private real estate today compare with other periods of market disruption, and which areas in the U.S. stand to do well?
Fuller: We’re particularly focused on garden-style ground-up development in Tampa, Orlando, and South Florida. Current projects under construction, as well as pre-stabilized assets in those markets, will continue to have challenges, and we will be a financial solution for new equity, preferred equity, and recapitalizations.
Despite the current high-interest rate environment and rising construction costs, we’re continuing to execute deals, focusing on projects stabilizing in 2025 and 2026. I remain very bullish on many Florida suburban submarkets, and we will not be pausing despite temporary economic headwinds, especially where we plan to offer rental rates lower than inferior comps.
We continue to see an imbalance in efficient, workforce multifamily projects. We believe it is an opportune time to invest in growth areas and complement new grocery-anchored retail and high-performing schools.
Prince: What types of strategies is Participant Capital finding the most opportunities for deals?
Fuller: As I mentioned, we recently launched the Participant Capital Sun Belt Multifamily Development Fund 1, which will allocate capital to ground-up multifamily projects in Florida. We are targeting six new deals with RPC that should yield favorable returns for our LPs, so Fund 1 should be deployed within 18 months.
We’re also deploying capital into preferred equity opportunities and net lease investments, which will provide our investors with a higher yield current income strategy. Our goal as a preferred equity partner is to invest $100 million of bridge equity into pre-stabilized multifamily projects over the next 12 months. We would ideally like our “pref” capital to be invested for up to three years.
The net lease strategy focuses on build-to-suit, sale-leaseback or acquiring existing high-credit assets where we can gain additional yield by partnering with merchant builders needing capital solutions or taking construction risk.
We look at preferred equity and net lease as two investment approaches that return a premium compared to fixed-income alternatives.
Russ Alan Prince is the executive director of Private Wealth magazine and chief content officer for High-Net-Worth Genius. He consults with family offices, the wealthy, fast-tracking entrepreneurs and select professionals.