As an investor, especially one looking at real estate private debt, there is a very specific, visceral fear that tends to surface when market volatility shakes the headlines. It’s that knot in your stomach that asks: “If things get really tough, what stops the borrower from tossing the keys on the desk and walking away?”
This isn’t an unreasonable worry. History has shown that when a developer has little of their own capital at risk, their commitment to a troubled project evaporates quickly. When the debt equals the asset value, they have no reason to fight.
At Fidelis Private Fund, we view ourselves first and foremost as stewards of your capital. Our primary mandate is capital preservation; generating a competitive fixed-income yield is secondary to ensuring the return of principal. And the cornerstone of that preservation strategy is ensuring the borrower has significant “skin in the game.”
Understanding the Protective Cushion
“Skin in the game” is more than just a business cliché; it is the fundamental layer of protection between an investor’s capital and a potential loss.
In real estate lending, borrower equity serves as a protective cushion. Imagine a property valued at $10 million. If a lender provides 90% of that value ($9 million loan), and the market corrects by 15%, the property’s value drops to $8.5 million. Suddenly, the loan is underwater. The borrower has lost nothing of their own, and the lender is exposed to a loss.
Now, consider the same scenario with a significant equity requirement. If the lender only finances 65% ($6.5 million loan), the borrower must bring $3.5 million of their own cash to the table. If that same 15% market correction happens, the property is worth $8.5 million, but the loan balance remains covered with a $2 million buffer.
More importantly, the borrower has just seen their theoretical equity shrink. Their psychological motivation to finish the project, lease it up, or sell it to recover their remaining original investment is immensely higher than if they had zero downside.
The Fidelis Approach to Borrower Motivation
We believe that for a partnership to work, risk must be shared. We are relationship-driven, but our relationships are built on a foundation of mutual financial commitment.
At Fidelis, we rarely exceed a 65% Loan-to-Value (LTV) ratio. This means our borrowers are typically bringing 35% or more of the capital stack in actual cash equity. We are not interested in borrowers looking for 100% financing or highly leveraged speculative plays. We want partners who are as committed to the success of the project as we are to protecting our investors.
When a borrower has millions of their own hard-earned dollars tied into a project, they become extremely resilient problem-solvers. When they encounter delays, cost overruns, or shifting market dynamics, they don’t walk away—they dig in. They find solutions because their own financial well-being depends on it. That motivation is your ultimate safety net.
Precision in Operations
It is important to be precise about how we manage these investments. Fidelis is the architect of these deals. We source the relationships, we rigorously underwrite the property value, and we structure the loan terms to ensure that a crucial equity buffer is in place. We make the credit decisions.
However, once the loan is closed, we utilize trusted third-party loan servicers to handle the day-to-day administration of payment collection. This provides an essential operational check-and-balance, ensuring professional administration while allowing our team to focus on asset management and stewardship.
An Invitation to Connect
We believe that the best way to understand our approach to capital preservation is through direct conversation. The fixed income landscape can be complex, and you should know exactly who is managing your wealth and the philosophy behind their decisions.
I am not hidden behind a corporate gatekeeper. I view my investors as partners, and I am radically accessible to them. If you are an accredited investor looking for a steward who prioritizes the safety of principal through conservative underwriting, I’d love to hear your story and share ours.
The best way to start is just to reach out—I answer my own phone. Call me directly at 760-258-4486 or by email jlloyd@fidelispf.com.
See Our Latest Performance Report
Fidelis Private Fund annualized yield paid to Limited Partners for the 4th Quarter 2025. Click here for a summary of Fidelis’s annualized yield since inception.
Fidelis 2028 Vivid Vision – Where are we going and how are we going to get there!
The Fidelis 2028 Vivid Vision document provides a comprehensive blueprint of the company’s strategic direction, core values, and operational principles, highlighting its commitment to capital preservation, growth, innovation, and client-centric services. Click to read the Fidelis vision.