Preferred Equity Finance
Access preferred equity capital that sits alongside your equity position, providing additional funding with a priority return structure. An increasingly popular alternative to mezzanine debt for developers seeking to maximise leverage without additional secured debt.
Key Features
Priority Returns
Preferred equity holders receive returns before common equity
Equity Alternative
Reduce cash equity without adding secured debt to the capital stack
Retain Control
Maintain full project control and decision-making authority
Growth Capital
Deploy your equity across multiple projects simultaneously
Recently Funded Deals
See what's possible with the right finance solution
*Based on real deals settled by Andorra Private. Details may be generalised for confidentiality.
Unregistered MIS — Industrial Warehouse Portfolio
The Scenario
A property syndicate structured as an unregistered managed investment scheme sought finance to acquire a portfolio of large industrial warehouses in regional Victoria.
The Challenge
The syndicate required non-recourse lending with no directors guarantees — a structure many lenders are unfamiliar with. Loan documentation needed to reflect the MIS trust structure correctly, requiring coordination between the client, their solicitor, and the bank's solicitor.
The Solution
We identified a major bank willing to provide a lease-doc facility on a non-recourse basis. We then worked closely with all parties — the client, their legal counsel, and the bank's solicitors — to ensure the loan contracts correctly reflected the trust structure and that no personal guarantees were required.
The Outcome
The facility was successfully arranged with a major bank. The syndicate acquired the warehouse portfolio with no directors guarantees, and all loan documentation was executed correctly on the first pass.
Non-Recourse
Structure
None
Guarantees
Lease-Doc
Facility Type
Major Bank
Lender
Client Testimonials
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“Nick as a broker is part of my dream team for not only residential but especially commercial lending and has been nothing short of brilliant! Always calm under pressure and gets the job done. Very proactive and knowledge far superior to other brokers I've worked with. He's also got another option up his sleeve to ensure you achieve your goals. Absolutely no hesitation in recommending Nick for all things finance. Do yourself a favour and have a preliminary chat with Nick.”
Rachael
Commercial Lending
“Nick is an absolute gun at his job. I've been through many brokers over the years, and he is by far the best I've worked with. His knowledge in the commercial space is second to none, and the way he handles the process is completely seamless.”
P
Commercial Finance
“Nick is super professional and highly competent in his craft. He guided me with credible lending options and advice during my commercial property purchase journey. Highly recommended.”
ADS Rawal
Commercial Property
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Start ApplicationWhat Is Preferred Equity?
Preferred equity is a capital structure that sits between debt and common equity. Unlike mezzanine finance, which is a secured loan, preferred equity is an equity investment with priority return rights. The preferred equity provider invests capital alongside the developer and receives a priority return (typically 15-25% per annum) before profits are distributed to the developer.
This structure is particularly useful when a senior lender will not consent to mezzanine debt, or when the total leverage in the capital stack needs to remain below certain thresholds. Because preferred equity is not debt, it does not appear on the project's borrowing structure and can improve the overall leverage metrics that senior lenders assess.
When to Use Preferred Equity
Preferred equity is most effective for medium to large developments where the developer wants to reduce equity exposure without the complications of subordinated debt. It is commonly used in apartment developments, mixed-use projects, and large-scale subdivisions where the capital requirement exceeds the developer's available equity.
We connect developers with established preferred equity funds and family offices that invest in Australian property development. Each has different return requirements, minimum investment sizes, and project preferences, and we match your project to the most suitable capital provider.
Discuss Your Preferred Equity Finance Needs
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Frequently Asked Questions
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