Perspectives · six positions

Our views.

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Six structural positions, each dated and each carrying the evidence that would change it. None of them is a view on an asset, a sector or a market, and none of them says where capital should go. Each says something about how a transaction of a given shape has to be built, and each can be wrong. When one fails it is amended here with a date. Not deleted.

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01 · Held

Six positions

Six propositions about how a transaction is built. Each one names what would change it.

Each entry states the structural claim, the reason it holds, and the evidence that would overturn it. They are written at the level of the instrument, because that is the level at which a structure is either right or wrong.

01 · The register

The composition of the register decides the regime the vehicle is drawn under.

A domestic institutional register and a foreign one reach the same illiquid asset through different instruments: different conditions on each tranche, different tests before capital comes home, and a promotion perimeter engaged separately the first time somebody speaks into each territory. A vehicle drawn for one register does not admit the other by amendment. It admits it by a second structure, and the second structure is priced at formation or discovered at the second close. Changes our mind: a regime under which both registers enter and exit on the same conditions.

02 · The exit

The exit specification is a term of the entry documents.

Transfer restrictions, pre-emption rights, change-of-control consents, repatriation conditions and listing eligibility are each drafted at entry, and each one closes a lane before anybody has thought about selling. The specification is therefore not a decision taken in year four. It is a set of terms accepted in year one by people whose whole attention is on the purchase, and it is read back by a buyer who knows which lanes are shut. The fifteenth entry at where structures break names the instruments that close each lane. Changes our mind: an exit route reopened after entry without the agreement of the party whose consent closed it.

03 · Data centres

In a data-centre transaction, power, water, grid and equipment are consents rather than tasks.

Each of the four is granted by a third party on that party's own clock, and none of them moves faster because the structure that needs it is well drawn. They belong in the entry instrument as conditions, each with the party who grants it and the date it has to be granted by, rather than in a programme as items with an owner inside the manager. A structure that carries them as tasks is carrying a consent it does not hold. Changes our mind: any one of the four becoming a term the transacting parties can settle between themselves.

04 · Consents

A consent map drawn at country level is drawn at the wrong altitude.

Where a federal system devolves the permitting of a project, the register that records title, and the authority that grants each approval, those are state instruments granted by state parties on state timetables. A map drawn at the level of the country names none of the parties whose signature the transaction actually needs, and a timetable built on it is built on an average of things that do not average. The map is drawn at the level the consent is granted at, or it is not a map. Changes our mind: the consents a transaction of this shape needs being granted under one national instrument by one national authority.

05 · Clearance

A clearance obtained after the event is not a condition a structure can stand on.

A structure drawn on the assumption that a missing clearance can be regularised later is carrying a condition precedent as though it were a covenant, and the two behave differently in every document they appear in. A condition precedent stops a drawdown. A covenant is breached, and then cured. Where a clearance sequence is prescribed, the entry instrument either treats the clearance as a condition with a date and a holder, or the transaction meets the difference at the first drawdown. Changes our mind: a clearance regime under which a later grant restores the position as though the sequence had been followed.

06 · Two regimes

Escrowed development and a rental platform are different regimes from the first day.

One carries a delivery obligation owed to a purchaser, a prescribed account through which receipts pass, and a channel through which that purchaser can bring a complaint. The other carries a lease, a tenant and an income stream. They are not two speeds of one transaction, and the choice between them is made at the entry instrument rather than at the exit, because the entry instrument is where the delivery obligation and the account attach. The same split is read at exit design. Changes our mind: a single instrument under which both are held on the same conditions.

02 · The rule behind the page

Why these six

Amended in the open when the evidence changes.

A position is listed here only where it is a claim about structure: which instrument settles a question, which clause an item belongs in, or at what level a consent is granted. That is the test each of the six above passes, and it is why each of them can be checked against a document rather than against a market.

Amendments

None. This row is where they will appear, under the convention set out on Perspectives.

Where each one stops

Every position above states a structural consequence. Whether a given instrument bears the reading on a given set of facts is settled by the manager's own counsel and its own tax advisers, in each jurisdiction concerned, on the day.

We design and stress-test the structure for the manager who appoints us, and hand over an architecture in which every dependency is named against the party who owns it. The investment decision, the documents and the transaction itself stay with the manager, its counsel, its tax advisers and its regulated counterparties.

Where structures break Worked structures Exit design