Episode summary
Episode 348: Larissa Herczeg of 1 Seed Partners: Built to Last - Sowing the Seeds of Real Estate ...
The Fiftyfaces Podcast
· · 29 min · Hosts: Aoifinn Devitt · Guests: Larissa Herczeg
Summary
Larissa Herczeg says One Seed Partners is built around a simple belief: real estate is still a people business, even when the assets are hard and the underwriting is spreadsheet-heavy. She describes her own path into the industry as accidental rather than planned, and says that over time she came to value how much tenant quality, market knowledge, and manager skill drive outcomes. Her broader investing view is partner-first and sector-agnostic, with underwriting that comes after conviction about the people running the capital.
The conversation centers on seeding emerging real estate managers and why Larissa thinks the opportunity is still underserved. She argues that shrinking real estate allocations and the difficulty smaller firms face in winning institutional backing create a gap for discretionary seed capital. One Seed wants structures with revenue participation and capped upside rather than perpetual ownership, and Larissa says the firm adds value by helping with introductions, pitch practice, deck reviews, and back-channel diligence, while managing expectations about fundraising.
On the current market, she is constructive but cautious. Larissa says lower fundraising vintages have historically produced better returns, and she sees attractive opportunities in conservative, often unlevered deals where lender fatigue creates forced-sale situations. At the same time, she worries that markets have been “partying” for too long and that underwriting should account for the possibility of a broader downturn.
Key takeaways
- Larissa Herczeg says One Seed Partners is “people first” and only then sector- or asset-specific in how it underwrites real estate managers.
- She argues the seeding market is underserved because smaller groups struggle to raise institutional capital, even though there is still money for deals.
- Larissa says One Seed prefers ownership-light structures with revenue participation and capped upside rather than perpetual control obligations.
- She sees current vintage conditions as attractive for conservative, often unlevered deals, especially where lender fatigue creates dislocated pricing.
- Larissa warns that investors should not assume markets keep rising, and says underwriting must consider what happens if the cycle turns hard.
Notable quotes
“our core belief is in people and I I still think even with real estate that still ties over”
“our thesis really is it's very hard for a lot of these smaller groups to get off the ground”
“we don't want true perpetual ownership. We want a revenue participation, an ownership light”
“fundraising for these groups is impossible. And so that is very tricky”
“I do feel like there's this overhang that the markets don't always go up”
How the episode opens
This podcast series is kindly sponsored by Evston Capital. For over 20 years, Evston Capital has had a key focus in identifying early stage investment managers it believes are capable of generating long-term value added returns in complex innovative strategy areas. This series is also sponsored by Alvine Capital.
Alvine Capital is a specialist investment manager and placement boutique with a particular focus on alternative assets, a significant presence in London and Stockholm. And then as far as what keeps us up at night, we're seeing a lot of great deals with base cases, decreasing rents, expanding cap rates on exit, unlevered deals, checks every box. Seems very exciting, but I do feel like there's this overhang that the markets don't always go up.
And I my team is probably sick of this analogy, but I like to say back in your college days, you can go out and party and it seems like a good idea. And the longer you party, the worse you feel the next day. And if you keep partying too much, you wind up dead in a gutter.
And it feels like we're at that point where we've been partying for a really long time as an economy. And I worry we're going to wind up dead in the gutter. And if that happens, there's really no underwriting today that makes sense.
So we're trying to approach everything with rational behavior, but also with the knowledge in the back of our head that at some point things could come crashing down. And what happens to this investment when that happens? I'm Ethan David and welcome to the 50 Faces podcast.
a podcast committed to revealing the richness and diversity of the world of investment by focusing on its people and their stories. I'm joined today by Lissa Hersig who is founder and managing partner of One Seed Partners.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- real estate investing
- seeding business
- emerging managers
- capital raising barriers
- organizational sustainability
Companies and tickers mentioned
- 1 Seed Partners
- Blue Owl
- Oak Street Capital
- Evanston Capital
- Alvine Capital
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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The Fiftyfaces Podcast, this episode and its artwork belong to Aoifinn Devitt. Octagon is not affiliated with the show; this page is an independent summary.
