Capital Stack is defined as the depiction of the full sum of capital that is invested in a project, which includes pure debt, hybrid debt, and equity. Capital stack is arranged in the following manner:
Ø Sponsor equity
Ø Preferred equity
Ø Mezzanine investors (hybrid debt and equity)
Ø Second and other junior mortgages
Ø Investment-grade first mortgages
Capital Stack is one of the most useful instruments used by investors for assessing the risk in real estate investments.
When evaluating capital stack, we generally follow this guide map:
This help page and the information contained herein is provided for informational and discussion purposes only and is not intended to be a recommendation for any investment or other advice of any kind, and shall not constitute or imply any offer to purchase, sell or hold any security or to enter into or engage in any type of transaction.
Investing in venture capital funds is inherently risky and illiquid. It involves a high degree of risk and is suitable only for sophisticated and qualified investors.