Compounding Interest - How it works with BPG Holdings
- Cassidy Burns
- Nov 5
- 3 min read
The Power of Compounding in BPG Holdings’ Funds
At BPG Holdings, we believe wealth isn’t just built — it’s compounded. That’s why our fund structure is intentionally designed to reward patient, long-term investors through the power of compounded preferred returns.
Understanding the 8% Preferred Return
Each of our accredited investors is entitled to an 8% annual preferred return. This means that before BPG earns a dime from profits, our investors receive their preferred return first — plain and simple.
But here’s where the advantage compounds (literally).
If your 8% preferred return isn’t fully paid out in a given year — because capital is still being deployed or properties are in the stabilization phase — that return doesn’t disappear. It rolls over to the next year, accruing until it’s paid in full. Your capital continues to work for you, quietly compounding in the background.
Real-Life Example: Turning $100,000 into More Through Compounding
Let’s take a simple example.
Imagine you invest $100,000 into one of BPG Holdings’ funds. You’re entitled to an 8% preferred return — that’s $8,000 per year.
Now, you have two choices:
Take quarterly cash distributions.You’d receive about $2,000 every quarter, totaling $8,000 per year in cash flow. It’s a straightforward way to create passive income.
Reinvest and compound.Instead of taking the $8,000, you reinvest it into the fund — buying more shares that now earn their own preferred return.
Here’s how that looks over time:
Year | Starting Balance | 8% Return | New Balance (Compounded) |
1 | $100,000 | $8,000 | $108,000 |
2 | $108,000 | $8,640 | $116,640 |
3 | $116,640 | $9,331 | $125,971 |
4 | $125,971 | $10,078 | $136,049 |
5 | $136,049 | $10,884 | $146,933 |
In just five years, your $100,000 grows to nearly $147,000 — without adding a single new dollar. That’s the power of compounding preferred returns. & that’s only if the preferred return is hit, our target IRR is 18-22%, do that math!
Now imagine that growth paired with asset appreciation and profit participation from our fund’s real estate portfolio — and you can see why accredited investors choose to let their capital ride.
Two Paths to Grow Your Investment
We offer our investors the flexibility to choose how they want to participate in this compounding effect:
Quarterly Cash Distributions:Receive your distributions directly as cash each quarter. Many investors prefer this approach for steady, passive income.
Reinvest and Compound:Instead of taking cash, you can reinvest your distributions to purchase additional shares in the fund. This strategy compounds your capital base, allowing you to earn returns on both your original investment and your reinvested profits — a snowball effect that can significantly increase your total return over time.
Why Compounding Matters
Compounding is one of the most powerful forces in wealth creation. As your earnings generate more earnings, growth accelerates — and over several years, the results can be exponential.
In private real estate funds like ours, this dynamic is magnified by disciplined acquisitions, value-add strategies, and consistent cash flow from stabilized assets.
Open to Accredited Investors
Now that BPG Holdings operates under Regulation D, Rule 506(c), we can openly share and market our offerings to the public. This means any accredited investor can now learn more, connect with us, and participate in BPG’s fund opportunities.
Ready to See Your Capital Compound?
If you’re an accredited investor looking to compound both your capital and your legacy, we’d love to show you how BPG’s funds can help you reach your wealth-building goals.
👉 Schedule a call with our investor relations team to see how your investment could grow inside a BPG Holdings fund.
Happy Investing ✌️
— Cassidy Burns
Founder, BPG Holdings
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