Capital Structure and FeesIndex
This category covers the group's financing discipline, compensation structure, and valuation and forecasting methodology.
Start here: Narrow Bank Financial Model
Financing discipline
Under the Narrow Banking Model, a building is built with equity and no construction debt. Borrowing is intended to begin only after the building is leased and generating income. This sequencing is designed to remove construction-phase leverage as a source of risk to investor capital. The two articles below cover that phasing and the mortgage-financing structure used once debt is in place.
- Narrow bank financial model — Two-phase financing discipline planned for the Direct-Hold Solutions: equity-funded unlevered construction, then First Secured Mortgage Debentures collateralized by the completed buildings. Only the Canada vehicle is established.
- Debt service and financing structure — General commercial-mortgage financing conventions — loan-to-value limits, amortisation, interest-rate and refinancing risk — and how they interact with the ICR borrowing covenant; not the Direct-Hold Solutions' own planned debenture financing.
Compensation and alignment
Woodfine's compensation model replaces the standard 2/20 private-fund fee structure. Developer profit is taken as equity held in trust rather than cash paid up front, and is released only after investor capital is returned. That sequencing is intended to keep the developer's incentive tied to the same outcome as the investor's. The article below sets out the fee mechanics and the fixed annual overhead contribution paid alongside it.
- Principal alignment and fee preservation — Compensation model planned to replace the 2/20 structure: developer profit taken as equity held in trust until investor capital is returned, plus a fixed annual overhead contribution.
- Promoter equity escrow — Why the promoter's equity-based compensation is held in escrow across all four Direct-Hold Solution vehicles, what the release condition is, and which entity holds it in each jurisdiction.
Valuation and forecasting methodology
Every forward-looking figure in this wiki — a 10-year forecast, a stress test, a projected yield — is a modeled estimate, not a guarantee of results. The two articles below set out the accounting standards behind each forecast and the stress scenarios applied to it. Reading them is intended to show a reader exactly which assumptions drive a projected number, not just the number itself.
- IFRS forecast methodology for Direct-Hold Solution vehicles — How a 10-year IFRS-styled financial forecast for a Direct-Hold Solution vehicle applies IFRS 18, IAS 40, IFRS 13, and IFRS 2 to project future financial statements — illustrative, not a guarantee of results.
- How sensitivity and stress-test analysis works for Direct-Hold Solutions — How Direct-Hold Solutions model interest-rate, occupancy, and development-yield stress against the 1.20x interest-coverage covenant.