A private real estate company (the sponsor) establishes a Fund with certain parameters, then raises money from investors to capitalize the fund. The sponsor uses the capital to make investments under the fund. The money can be deployed anywhere in the capital stack; funds can be used in the mezzanine debt, bridge loan, or senior loan positions of the capital stack. The distribution of these funds will depend on what is established in the private placement memorandum (PPM). A fund allows an investor to spread the risk of the investment across all future deals instead of putting it all in a single deal.