Fund Structures
Multiple SPVs or one open-ended fund? A cost and operational comparison
Running multiple SPVs or moving to a fund? A practical comparison of the cost and operational trade-offs for property, credit and VC sponsors deciding when to consolidate deal-by-deal vehicles into a single fund structure.
· 2 min read · FundPro
Most active property sponsors, credit originators and VC managers in Australia start with SPVs (Special Purpose Vehicles). By the fourth or fifth deal, the question surfaces: is this still the right approach, or should we have a fund?
This guide walks through the trade-off between running multiple SPVs and consolidating into a single open-ended fund.
The intuition that SPVs are cheaper is half right
SPVs are demonstrably cheaper to set up than a fund ($20,000-$60,000 vs $50,000-$150,000). The intuition breaks down on ongoing costs. A single SPV costs roughly $40,000-$115,000 per year to operate. An open-ended fund costs $90,000-$300,000 per year. That looks more expensive until you remember the fund houses every deal you do, while each SPV houses only one.
A worked example: property sponsor doing one deal per year
Assume a sponsor acquires one property syndication per year, holding each for five years. In steady state, five active SPVs run simultaneously.
- Five active SPVs at ~$75,000/year each = $375,000
- Plus setup of one new SPV/year at ~$40,000 = $40,000
- Total annual cost: ~$415,000
Compare to a single open-ended fund holding all properties:
- Fund annual operating costs (midpoint): ~$195,000
- Sub-trust establishment per new deal: ~$15,000
- Total annual cost: ~$210,000
On these numbers, the SPV model costs roughly twice as much per year. Over five years of steady operation, the difference is around $1 million.
Where the SPV model still wins
- Occasional, ad hoc deals - too infrequent to justify a fund's fixed costs.
- Deal-specific investor preferences - some investors strongly prefer to evaluate each deal on its own merits.
- Highly specialised or one-off opportunities that do not fit a broader strategy.
- Co-investments alongside a main fund.
Where the fund model wins
- Consistent, frequent deal flow - three or more deals per year.
- Investors wanting diversification (institutional and family office capital).
- Building a long-term franchise with a track record and AUM metric.
- Capital reuse - realised assets can be redeployed without a new raise.
- Operational efficiency across compliance, administration and investor reporting.
Operational differences beyond cost
Every new SPV requires fresh investor onboarding, AML/KYC, and a full capital raising process. An open-ended fund consolidates this into one continuous process. Running multiple SPVs also means separate reports, distribution statements, and tax statements for each vehicle - complexity that investors (and managers) have to consolidate themselves.
When to make the move
Consider consolidating when: you are running three or more concurrent SPVs; your investor base is asking for diversified exposure; capital raising overhead per deal is becoming prohibitive; you want to present a manager-level track record to institutional capital; or you want the operational simplicity of one provider stack.
Working with FundPro
FundPro provides licensing, trustee and fund administration services for both SPV structures and full wholesale funds in Australia. We have helped several clients transition from an SPV book to a fund structure as their business scales. Get in touch at info@fundpro.com.au.
This article provides general information only and does not constitute legal, tax or financial advice.
