Co-GP
FinancingA Co-GP (co-general-partner) is someone who shares the sponsor responsibilities — and sponsor economics — on a syndication. Instead of one GP doing everything alone (sourcing, underwriting, capital raising, loan guarantees, asset management, investor relations), two or more GPs split the workload and the upside according to a co-GP agreement.
How it works. Co-GP arrangements are common when one sponsor has the deal but lacks the track record, balance sheet, or investor network to raise equity and sign on debt, while the other has those resources but lacks a deal pipeline. The co-GP agreement allocates roles: who signs on the loan (net worth/liquidity requirements), who raises LP capital, who manages the asset post-close, and how the GP economics — acquisition fees, asset management fees, and the promote — are divided. Typical splits range from 50/50 to 70/30 depending on who brings what.
Co-GP is how newer operators break into institutional-sized deals. By partnering with an experienced sponsor, you borrow their credibility with lenders and investors while contributing the deal itself, boots-on-the-ground management, or specialized market knowledge.
Example. A local operator finds a $3,500,000 24-unit value-add property. They can manage it, but they lack the net worth to sign on the agency debt and don’t have an LP investor database. They bring in a co-GP who has a $3M net worth (satisfying Fannie Mae’s guarantee requirement) and a 200-investor email list. The co-GP agreement allocates: the finder GP runs operations and takes 40% of GP economics; the capital GP signs on the loan, raises equity, and takes 60%.
The co-GP layer is an important part of the capital stack structure — it determines who controls the sponsor entity that sits above the LP equity and below the senior debt.