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The 2023–2024 market made preferred equity explode.

Tight lending and higher rates pushed sponsors to raise more pref than ever before.

If you’re LP investing today, you’ll see it—and you need to know how it works.

Because here’s the catch: if you don’t understand where pref sits in the stack, you could end up behind it—taking on more risk, getting diluted, or even watching your equity get wiped out while pref investors still get paid.

In this episode of The Passive Income Playbook (on the Best Ever CRE Show), Pascal Wagner sits down with Paul Moore, founder of Wellings Capital, who’s raised $190M+ from nearly 1,000 investors across multiple funds. Paul explains what preferred equity really is, how it stacks up against common equity, and why his firm shifted heavily into pref in recent years.

In this episode you’ll learn:
✅ The capital stack explained: debt vs. preferred vs. common equity
✅ Why pref surged during the 2023–24 lending crunch
✅ How pref protects LPs in downturns—and when it doesn’t
✅ JV hybrid equity: a middle ground with both safety and upside
✅ Practical ranges of pref returns (and red flags if they’re too high)
✅ Which investors should consider pref vs. those who should stick with common

Whether you’re new to LP investing or you’ve wired into dozens of deals, this episode will give you the clarity to evaluate opportunities with confidence.

Chapters:
00:00 – Why the 2023–24 Market Made Pref Equity Explode
01:47 – Paul Moore’s Journey: From Entrepreneur to $190M Raised
06:39 – Lessons From Losing Money: Speculating vs. Investing
12:19 – Capital Stack 101: Debt, Common Equity, and Pref Explained
17:00 – Why Sponsors Needed Pref: Lending Crunch, Gaps, and Rescue Capital
23:52 – When Pref Outperforms (and When It Caps Your Upside)
31:30 – JV Hybrid Equity: Capturing Upside With Downside Protection
38:54 – Risks, Fraud, and The #1 LP Mistake to Avoid
45:21 – What Realistic Pref Returns Look Like (and When to Walk Away)
49:17 – Who Pref Equity Is Best Suited For (and Portfolio Fit)
52:32 – Wellings Capital’s Evergreen Income & Growth Funds