Sponsor alignment in the search for capital

For those that are new to syndicated deals or multifamily development. The “Sponsor” is the group putting the deal together. Tamarack Capital is a sponsor of multifamily investment deals. Our responsibility as that partner is putting the land under contract, underwriting, gaining entitlements, construction, lease up and obviously funding the project through a combination of sponsor capital, private capital, retail lending, and investor capital. This article refers to our experience exploring private capital.

Last week, we met with a private capital/equity firm that funds new multifamily developments. After moving beyond the initial introductions, we presented several projects we’re evaluating in the Tri-Cities, WA area. This is a new capital relationship for us, so we were learning the process in real time. We found out that only about 25% of sponsors make it past the first meeting to receive a “range of terms” presentation—essentially a next-step offer, contingent on interest. A few days later, our equity broker called with good news: the firm not only liked the deal, they liked us—and they were moving forward to present terms. Ahead of that meeting, we asked the broker why they chose to advance the conversation. His answer was telling. “Honestly, it’s all about sponsor alignment and deal fundamentals,” he said. “But more than anything, it’s sponsor alignment. That’s what determines where the equity goes.”

Understanding What True Alignment Looks Like for Capital Providers

When it comes to private real estate investing—or any alternative asset class—the question behind all questions is simple: Can I trust the sponsor with my capital?

For accredited investors, this isn’t just a matter of gut feel. It’s about alignment. Alignment of risk. Alignment of incentives. Alignment of priorities. And while the term sponsor alignment gets tossed around frequently, not every sponsor defines or practices it the same way.

At Tamarack, alignment isn’t a buzzword—it’s a non-negotiable. Here’s what real alignment means to us, and why it should matter deeply to you as a capital provider.

1. Skin in the Game—Actual Dollars, Not Just Hours

The most obvious form of alignment is co-investment. When sponsors commit real capital alongside their LPs, it sends a clear signal: we believe in this deal enough to risk our own money. And sure enough the equity firm we were working with required a sizable stake from Tamarack.

At Tamarack, we always invest personal capital into the projects we bring forward. We don’t just source the opportunity, structure the deal, and walk away with fees. We participate fully—and feel every twist of the market alongside our investors.

Why it matters: If your sponsor wins regardless of performance, your interests aren’t aligned. Look for operators who share in both the upside and the downside.

2. A Team That’s Aligned Internally, Not Just Externally

Sponsor alignment isn’t only about how a sponsor relates to investors—it’s also about how the people behind the sponsor operate as a team. At Tamarack, our leadership is made up of complementary partners with a mix of experience across acquisitions, operations, capital markets, and asset management. Just as important as our individual track records is our ability to collaborate, challenge assumptions, and maintain shared discipline across every deal. Alignment with investors starts with alignment between decision-makers. When the GP team is rowing in the same direction, it shows up in execution—and in results.

3. Compensation Structures That Reward Investors First

Fee structures should be transparent, reasonable, and designed to reward sponsors after investors are protected—not before.

In our offerings, preferred returns come first. Sponsors like us only participate in profits after you, the LP, have received a minimum threshold of return. We avoid aggressive promote terms or lopsided waterfalls that disproportionately benefit the GP.

Why it matters: When a sponsor’s payday only happens after yours, you can trust their incentives are structured for stewardship, not just deal volume.

4. Operational Accountability and Long-Term Thinking

True alignment shows up in the day-to-day. Are sponsors managing expenses as if the property were their own? Are they communicating regularly, addressing issues proactively, and thinking beyond the exit?

At Tamarack, we bring investor transparency into every stage of the process—from acquisition to renovation to refinance or sale. We send quarterly updates, detailed financials, and walk through challenges as they emerge. Our strategy is built for long-term wealth creation, not short-term optics.

Why it matters: Investors deserve partners who think like owners, act with discipline, and maintain clear communication no matter the market cycle.

5. Selectivity Over Scale

Some sponsors pride themselves on how many deals they can close. We pride ourselves on how many we don’t.

Every opportunity that makes it to our investor base has passed through a highly selective process. Many don’t pencil out. Others simply don’t meet our alignment criteria—be it with partners, market risk, or investor return profile.

Why it matters: Sponsor alignment starts with deal selection. If they’re not selective, you have to be.

Final Thought:

Sponsor alignment isn’t just about shared upside—it’s about shared responsibility. It’s about building structures, habits, and relationships that prioritize the investor’s long-term outcomes. At Tamarack, we treat your capital with the same care and scrutiny we apply to our own. Because when we invest together, we win—or learn—together.