Equity transfer model

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Each Direct-Hold vehicle is designed so its Investment Units transfer over-the-counter between private parties, with the vehicle's own governing body recording the completed transfer. Only one vehicle is currently established — the Canada limited partnership, Woodfine Professional Centres Limited Partnership — and its units are not currently freely transferable, because the partnership is subject to an active British Columbia Securities Commission cease-trade order. The United States, Spain, and Mexico vehicles described below are planned, not yet established. Once transferability applies, two structural principles govern the design: freely transferable equity within a short, enumerated set of conditions, and peer-to-peer execution — no formal secondary market, no market maker, no corporate buyback facility. The model relies on the [[topic-fiduciary-data-mandate|fiduciary data mandate]] for ledger integrity and operates alongside the interest coverage ratio discipline applied at the asset level.
Each Direct-Hold vehicle is designed so its Investment Units transfer over-the-counter between private parties, with the vehicle's own governing body recording the completed transfer. Only one vehicle is currently established — the Canada limited partnership, Woodfine Professional Centres Limited Partnership — and its units are not currently freely transferable, because the partnership is subject to an active British Columbia Securities Commission cease-trade order. The United States, Spain, and Mexico vehicles described below are planned, not yet established. Once transferability applies, two structural principles govern the design: freely transferable equity within a short, enumerated set of conditions, and peer-to-peer execution — no formal secondary market, no market maker, no corporate buyback facility. The model relies on the vehicle's own governing body maintaining custody of ledger records and operates alongside the interest coverage ratio discipline applied at the asset level.

## Key takeaways

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## Freely transferable equity

Each Direct-Hold vehicle issues Investment Units in its own isolated property ledger. "Freely transferable" means a holder may offer their interest to any eligible counterparty; the vehicle's governing body does not exercise business judgment over who may acquire it. In Canada, the General Partner is contractually obligated to admit any transferee — subject only to two narrow, enumerated grounds: (a) counsel's opinion that the transfer would violate securities or other law, or (b) the General Partner's belief that the transferee's required eligibility representations are untrue. Each unit of equity issued constitutes an [[topic-investment-units|investment unit]] in the named asset.
Each Direct-Hold vehicle issues Investment Units in its own isolated property ledger. "Freely transferable" means a holder may offer their interest to any eligible counterparty; the vehicle's governing body does not exercise business judgment over who may acquire it. In Canada, the General Partner admits any transferee who completes the required transfer documentation, subject to a narrow exception: if the General Partner becomes aware that beneficial owners of 45% or more of the outstanding units are, or may be, financial institutions, it may refuse to issue or register a transfer to a person unless that person confirms it is not a financial institution. Each unit of equity issued constitutes an [[investment-units|investment unit]] in the named asset.

This distinguishes the model from restricted-equity structures — common in private real estate vehicles — where the issuer retains an open-ended right of first refusal or exercises discretionary transfer-approval power. A transferee does make the same eligibility representations (residency, investor-status, and similar) on each transfer — this is not a business-judgment re-approval, but it is a real, recurring step, not the absence of one.

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## No subjective liquidity requirements

Traditional fund structures impose redemption gates, liquidity reserves, and lock-up periods subject to fund manager discretion. The Equity Transfer Model contains none of these mechanisms — see [[topic-redemption-elimination|Redemption Elimination]] for the structural rationale. Liquidity terms are determined by the market of willing buyers, not by corporate entity policy. The [[topic-perpetual-equity-model|perpetual equity model]] applies the same logic over an indefinite holding horizon.
Traditional fund structures impose redemption gates, liquidity reserves, and lock-up periods subject to fund manager discretion. The Equity Transfer Model contains none of these mechanisms — see [[redemption-elimination|Redemption Elimination]] for the structural rationale. Liquidity terms are determined by the market of willing buyers, not by corporate entity policy. The [[perpetual-equity-model|perpetual equity model]] applies the same logic over an indefinite holding horizon.

## Ledger integrity

The asset ledger records each transfer with a full chain of title. Ownership of a fractional interest is a ledger entry, not a paper certificate. The mathematical integrity of the ledger is maintained by the corporate entity's fiduciary data systems — described further in [[topic-fiduciary-data-mandate|Fiduciary Data Mandate]].
The asset ledger records each transfer with a full chain of title. Ownership of a fractional interest is a ledger entry, not a paper certificate. The mathematical integrity of the ledger is maintained by the vehicle's own governing body as custodian of record.

## The bottom line

The Equity Transfer Model removes the corporate entity from the liquidity equation without removing it from the record-keeping obligation. Investors can transfer their position to an eligible counterparty at any time; the vehicle's governing body's role is to record that transfer accurately — declining only on the narrow, enumerated grounds described above — not to exercise open-ended approval discretion or to provide a market for it. The absence of redemption gates and liquidity windows is a design feature, not a limitation: it eliminates the structural tension between asset liquidity and investor liquidity that characterizes pooled fund structures. The ledger — maintained under the fiduciary data mandate — provides the authoritative record of every transfer in the chain of title.
The Equity Transfer Model removes the corporate entity from the liquidity equation without removing it from the record-keeping obligation. Investors can transfer their position to an eligible counterparty at any time; the vehicle's governing body's role is to record that transfer accurately — declining only on the narrow, enumerated grounds described above — not to exercise open-ended approval discretion or to provide a market for it. The absence of redemption gates and liquidity windows is a design feature, not a limitation: it eliminates the structural tension between asset liquidity and investor liquidity that characterizes pooled fund structures. The ledger — maintained by the vehicle's own governing body — provides the authoritative record of every transfer in the chain of title.

## See also

- [[topic-direct-hold-framework|Direct-Hold Framework]] — the ownership structure that makes equity freely transferable
- [[topic-fiduciary-data-mandate|Fiduciary Data Mandate]] — data governance requirements that underpin ledger integrity
- [[topic-redemption-elimination|Redemption Elimination]] — why no corporate buyback facility exists
- [[direct-hold-framework|Direct-Hold Framework]] — the ownership structure that makes equity freely transferable
- [[redemption-elimination|Redemption Elimination]] — why no corporate buyback facility exists