Perfomance Fee Structure
Overview
OASES employs a dual performance fee model designed to align the interests of General Partners (GPs) and Limited Partners (LPs) over both short- and long-term horizons. This structure rewards the GP for generating consistent income and maximizing asset value without compromising investor protections. The mechanisms are widely recognized by institutional allocators and structured for transparency, fairness, and flexibility in tokenized real estate ownership.
By splitting performance incentives into ongoing yield-based fees and long-term IRR-based carry, OASES ensures that investor capital is prioritized, and upside participation is directly tied to real performance above defined thresholds.
1. Ongoing Yield-Based Performance Fee
Purpose: To incentivize consistent yield generation from rental income.
Mechanism:
LPs receive quarterly (or annual) distributions derived from net rental income.
GPs are entitled to a performance fee only on returns exceeding a preferred return of 6% per annum.
The excess return (i.e., anything above the 6% preferred yield) is subject to a tiered waterfall of performance fees payable to the GP.
Waterfall Table:
6% – 8%
20%
8% – 10%
30%
10% – 12%
40%
Above 12%
50%
This means that:
LPs always receive the first 6% of net yield in full.
Any amount above 6% is split with the GP based on the brackets above.
Benefit to Investors: This tiered approach:
Encourages the GP to maximize rental performance
Rewards operational excellence
Ensures LPs receive a preferred baseline before any performance sharing occurs
Preserves incentive alignment while maintaining transparency and predictability
2. IRR-Based Exit Carry
Purpose: To incentivize long-term capital appreciation and strategic asset management through alignment on exit.
Mechanism:
A carried interest is triggered only upon the realization of capital, either through a full asset sale, portfolio recapitalization, or partial exit.
LPs must first receive a return of their original capital and a compounded preferred return of 6% before any carry is distributed to the GP.
Any residual upside beyond this hurdle is subject to a performance-based waterfall, mirroring the same structure as the ongoing yield model.
Exit Carry Waterfall:
6% – 8%
20%
8% – 10%
30%
10% – 12%
40%
Above 12%
50%
Waterfall Sequence Example: If a project exits at a 10.5% IRR:
LPs first receive their full principal and a compounded 6% return.
The next 4.5% of return is split as follows:
2% (6–8%) → 20% to GP
2% (8–10%) → 30% to GP
0.5% (10–10.5%) → 40% to GP
Optional Catch-Up Mechanisms: Depending on the terms of the SPV and operating agreement, certain structures may include a “catch-up” provision allowing the GP to receive accelerated carry once the preferred return is met, up to a capped threshold.
Note: This carry is only triggered upon a bona fide asset exit (sale, recapitalization, or portfolio event).
Alignment Philosophy
This dual-layer performance model reflects the following design principles:
Investor-first structure: Capital preservation and preferred return are prioritized before GPs receive any incentive.
Performance-driven: GPs are only rewarded when they materially outperform baseline expectations.
Transparent and programmable: All waterfall logic is embedded into the smart contracts governing each SPV.
By incentivizing both yield performance and long-term capital growth, OASES ensures ongoing attention to property management, strategic decision-making, and optimal timing of exits all while preserving investor protections and operational clarity.
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