Group RMC: $400 million to $3 billion AUM with conservative promises
In a Billionaire Insights talk, Richard shared notes from a two-day private jet tour with Group RMC. They covered five cities and two or three million square feet of real estate. He met the firm at $400 million in assets under management. In about six years it reached $3 billion.
Buy from forced sellers
Richard says Group RMC buys high quality assets from high quality sellers below market value because those sellers have to sell. His example was an institution on a seven-year private equity model. It owned 92 assets and needed to sell some before the quarter ended.
Promise less
The point Richard flagged for his audience was about returns. Group RMC has never promised investors 15 or 20 percent IRRs. It promises a conservative 8 to 12 percent and looks for steady cash flow.
Structure and time horizon
Richard also noted a unique investment structure and an evergreen time horizon. Group RMC is not a billionaire. He included it as a case study of the patterns he sees in billionaires.
In Richard's words
"They've never once promised their investors 15%, 20 % IRRs." (Richard C. Wilson, Billionaire Insights talk)
"They acquire high quality assets from high quality sellers below their market value because the sellers were forced to sell." (Billionaire Insights talk)
How to use this
- Look for sellers with a deadline, such as funds near the end of their term.
- Set return targets you can beat, not targets that win the pitch.
- Lead with steady cash flow when you talk to investors.
- Match your fund structure and time horizon to the assets you buy.
Questions and answers
How fast did Group RMC grow?
Richard says from $400 million to $3 billion in AUM over about six years.
What returns does Group RMC promise?
Per Richard, a conservative 8 to 12 percent, never 15 or 20 percent IRRs.
Where do its deals come from?
Richard says from high quality sellers who are forced to sell, like funds that must sell assets before a deadline.
Is Group RMC a billionaire?
No. Richard used it as a case study in a talk about billionaire ideas.