Guidelines

Club deals and joint ventures

In this section, we deal with variations in the application of the (Vehicle) Governance Guidelines to club deals and joint ventures. In practice, there can be many forms of regulated and unregulated vehicles including a range of separate accounts with single investors, club deals with a limited number of investors, and joint ventures where investors share control. In these situations, contractual arrangements, and in particular management and performance fees, tend to be very specific and customised to the circumstances and to the parties involved.
 

Control over investments

Investors participating in club deals and joint ventures are usually seeking greater control over the strategy and activities of the vehicle. They generally set more focused investment strategies and seek greater control of investment decisions. In addition to the matters set out in G30 of the Guidelines normally reserved for investors, investors are therefore likely to want to control the other matters such as the timing of acquisition and disposal of real estate assets.
 

The role of independent non-executive directors in club deals and joint ventures

In circumstances where a small number of investors are actively involved in the running of a vehicle, it would be expected that investors who participate in club deals and joint ventures would have the personnel resources to engage fully in the activities of the vehicle, without creating any management inefficiencies, such as delay in ratifying decisions. In these circumstances, the role of the independent non-executive directors may not be relevant.