Glossary
Real-Asset Capital Glossary
Plain-English definitions for the terms that come up when raising real-asset capital — across the capital stack, debt metrics, instruments, fund structure, returns and process.
53 terms across 7 categories.
Capital structure
Capital stack
The layered financing in a deal, from senior debt (lowest risk and return) up through mezzanine, preferred equity and common equity (highest).
Read →Senior debt
The most secured layer of the capital stack — first claim on cash flow and collateral, lowest cost, typically 50–65% of cost.
Read →Mezzanine debt
Junior debt that sits between senior and equity in the capital stack, with a higher cost (typically 10–15%), used to fill the leverage gap.
Read →Preferred equity
Equity that carries a fixed priority return ahead of common equity.
Read →Common equity
First-loss, last-paid capital with uncapped upside.
Read →Subordination
The ranking of claims in the capital stack: who gets paid before whom in a default.
Read →Recourse / non-recourse
Whether a lender can pursue the borrower's other assets if the loan defaults (recourse) or only the financed asset (non-recourse).
Read →
Debt metrics
LTV (Loan-to-Value)
Loan amount divided by asset value. The headline leverage measure for stabilised debt.
Read →LTC (Loan-to-Cost)
Loan amount divided by total project cost. Used in development finance where there is no stabilised value yet.
Read →DSCR (Debt Service Coverage Ratio)
Net Operating Income divided by annual debt service. Can the asset pay its loan from its own cash flow? Lenders typically want 1.25–1.40x or higher.
Read →Debt yield
Net Operating Income divided by loan amount. A rate-independent leverage check that ignores valuation noise.
Read →Interest Coverage Ratio (ICR)
Operating income divided by interest expense. How many times the asset's earnings cover the interest bill.
Read →Amortisation
The scheduled repayment of loan principal over the term, alongside interest.
Read →Bullet / balloon
A loan repaid in full at maturity rather than amortised over the term.
Read →Covenant
A contractual condition in a loan — e.g. LTV ceiling, DSCR floor — that keeps a borrower in compliance.
Read →Cash sweep
A mechanism that diverts surplus cash to debt repayment when a covenant is breached.
Read →
Debt instruments
Senior / permanent debt
Long-term financing against stabilised, cash-flowing assets.
Read →Construction / development finance
Staged-drawdown debt to build a project, which converts to permanent debt on completion.
Read →Bridge finance
Short-term, fast, higher-cost debt to a defined exit — typically a sale or refinance.
Read →Project finance
Non-recourse debt secured on a project's own cash flows. Common in infrastructure and energy.
Read →ECA (Export Credit Agency)
A government-backed financier supporting cross-border deals by guaranteeing or lending alongside commercial banks.
Read →DFI (Development Finance Institution)
A public or quasi-public lender — e.g. EBRD, IFC — funding development-aligned projects with concessional or near-commercial terms.
Read →Green bond / green loan
Debt whose proceeds are ring-fenced for environmentally qualifying assets, tracked against a published framework.
Read →
Equity & fund structure
LP (Limited Partner)
An investor that commits capital into a fund. Liability is limited to the commitment.
Read →GP (General Partner)
The manager running the fund and its strategy. Earns the management fee and carry.
Read →RAIF (Reserved Alternative Investment Fund)
A Luxembourg vehicle, AIFM-managed, fast to launch and EU-passportable. Skips the CSSF product approval.
Read →AIFM (Alternative Investment Fund Manager)
The regulated manager of an EU alternative investment fund under AIFMD.
Read →Cayman feeder
An offshore vehicle that channels LPs into a master fund, typically for tax and onboarding reasons.
Read →Master-feeder
A structure where multiple feeders — onshore and offshore — pool into one master fund that actually invests.
Read →SPV (Special Purpose Vehicle)
A single-purpose entity that holds one asset or deal, ring-fenced from other liabilities.
Read →PPM (Private Placement Memorandum)
A fund's offering document. Covers thesis, terms, risks and conflicts.
Read →LPA (Limited Partnership Agreement)
A fund's governing contract. Sets the economics, governance and rights between GP and LPs.
Read →Subscription agreement
The document by which an LP legally commits capital to a fund.
Read →DDQ (Due Diligence Questionnaire)
The standardised diligence questionnaire LPs send managers, covering team, strategy, track record, structure, risk and operations.
Read →
Fund economics
Management fee
An annual fee charged on commitments or NAV. Typically 1.5–2% in real-asset funds.
Read →Carried interest (carry)
The GP's share of profits above a hurdle. Typically around 20%.
Read →Hurdle / preferred return
The minimum LP return — often around 8% — that must be paid before the GP earns carry.
Read →Catch-up
A clause that lets the GP catch up to its full carry share once the hurdle has been paid to LPs.
Read →Waterfall
The contractual order in which proceeds are distributed between LPs and GP.
Read →Vintage
The year a fund starts investing. Used to benchmark performance against peers raised at the same time.
Read →Dry powder
Committed but undeployed capital still available to invest.
Read →Co-investment
An LP investing directly alongside a fund into a specific deal, usually with reduced or no fees.
Read →Re-up
An existing LP committing to a manager's next fund.
Read →
Returns
IRR (Internal Rate of Return)
The annualised, time-weighted return that makes the net present value of a series of cash flows equal to zero.
Read →Equity multiple (MOIC)
Total cash returned divided by total cash invested.
Read →Cap rate
Net Operating Income divided by asset value. A real-estate yield and valuation measure.
Read →Yield-on-cost
Stabilised NOI divided by total development cost. The development-return measure.
Read →NOI (Net Operating Income)
Property income after operating expenses, before debt service and taxes.
Read →
Process & intelligence
Mandate fit
How well a counterparty's stated appetite — geography, sector, ticket, structure — matches a deal. The core scoring concept inside GPX.
Read →Appetite rule
An explicit lender or investor preference — geography, sector, ticket, tenor, structure, security — that GPX scores deals against.
Read →Warm path
A pre-existing relationship route to a decision-maker at a target counterparty.
Read →Gatekeeper
The person or consultant controlling access to an allocator's shortlist.
Read →Placement agent
An intermediary that raises capital for a fund or transaction, paid via a fee on commitments.
Read →