Preferred Equity Explained: Don’t Get Wiped Out as an LP

Pascal Wagner · October 18, 2025 · 49 minutes · Watch on YouTube

Wellings Capital Paul Moore, Founder

Pascal Wagner talks with Paul Moore about preferred equity: where it sits in the capital stack, how it compares with common equity, and what LPs should check.

In this interview

Paul Moore lays out the capital stack, from the loan at the bottom to common equity at the top, and where preferred equity and mezzanine debt sit between them. He explains what a preferred equity investor gives up in exchange for being paid ahead of common equity, and when common equity comes out ahead. He describes a joint venture structure that sits in the middle of the stack while sharing in a deal’s upside, and how rescue capital can help or hurt the common investors already in a deal. He closes with what an LP should check before any preferred equity investment: the operator, the debt, and the assumptions behind the projections.

Chapters

0:00 Meet Paul Moore
1:18 From speculating to investing
10:31 The capital stack, from debt to common equity
18:17 When common equity does better than preferred
22:03 Where mezzanine debt fits
24:20 Joint venture hybrid equity
31:53 Rescue capital and the common investors
35:30 What to check before a preferred equity deal

The picture is YouTube’s poster for this episode. Published October 18, 2025 by Pascal Wagner, founder of DealStack. DealStack does not rate or recommend firms. Wellings Capital does not pay DealStack, so this page is not a paid placement.

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