ADIA calls on its deputies

As its investment activities slow, the real estate and infrastructure department of sovereign wealth fund ADIA is taking the opportunity to address some key personnel situations. 

What does private real estate’s biggest institutional investor do when markets mature making capital deployment become more challenging? It gets its house in order.

The Abu Dhabi Investment Authority, once again the largest institutional investor in the market with $46.94 billion of real estate assets according to PERE’s latest Global Investor 50 ranking, said the previously frenetic pace of its acquisitions slowed in 2016. In its annual review published in July, Abu Dhabi’s pre-eminent state fund said it was therefore increasing its focus on asset and portfolio management.

This shift in emphasis coincided with some significant senior movements within its real estate and infrastructure department in 2017.

Todd Rhodes – New role: Head of Asia-Pacific Previous role: Deputy head of Asia-Pacific Date change: September 2017 Date joined: 2012 Background: SilverPeak Real Estate Partners, Lehman Brothers Real Estate Private Equity Group

Most recently, interim head of Asia-Pacific Todd Rhodes took the role permanently last month. Previous holder Rob Walker left in April. Rhodes is responsible for the team’s real estate investment strategy, acquisitions and dispositions as well as asset and portfolio management. While he will continue to focus on developed gateway cities, Rhodes is also expected to expand ADIA’s investment activity in India, with an emphasis on mass-market residential, retail and logistics assets via which the fund expects to capitalize on the country’s urbanization and rising disposable income trends. Walker has since taken on an independent board role at the real estate investment management business of UK insurer M&G to work on its core investment offerings.

ADIA’s hospitality team also made a promotion in September, appointing Jake Puryear as global head. He is responsible for the investment strategy, acquisitions and dispositions, asset and portfolio management of the department’s hospitality business. He assumed the role after previous incumbent Michael Goodson retired in June.

Jake Puryear New role: Global head of hospitality Previous role: Deputy head of hospitality Date change: September 2017 Date joined: 2010 Background: Bank of America Merrill Lynch

ADIA’s hospitality business comprises a global portfolio of directly owned and joint-ventured single assets and portfolios, among them the Lanesborough Hotel in London, Grand Hyatt in Hong Kong, Novotel Darling Harbour in Sydney and the Miami Edition.

Tom Arnold New role: Deputy global head of real estate Previous role: Head of Americas (retained) Date change: January 2017 Date joined: 2009 Background: Cerberus Capital Management, ING Real Estate, Credit Suisse, Salomon Brothers

The elevation likely to be of most interest to the market, however, is that of Tom Arnold, ADIA’s long-serving Head of Americas to the additional role of deputy global head of real estate. Arnold has been charged with supporting global head Bill Schwab in developing and implementing the overall real estate strategy, taking in all aspects of investment, asset management and research. Considering the outcomes at the top of the department’s Asia and hospitality teams, it is conceivable that in promoting Arnold to deputy global head, ADIA is grooming Schwab’s successor. However, people familiar with the fund’s thinking told PERE that nothing should be read into the timing.

“The reasoning was purely organizational,” one source said. “Deputy roles have been created across the team over the past year or so, as a matter of good practice, and this is part of that process.”

“Both the department and the portfolio are extremely large. There are a lot of great assets, but these need to be managed carefully so that they make a worthy contribution to the overall portfolio. The view was that adding additional top-down strategic focus was important given the rapid growth and complexity of the portfolio in recent years.”

Arnold’s promotion, in fact, occurred in January, although ADIA did not publicize it. “It was an internal organizational move and does not change the way he interacts with the outside world,” PERE’s source said.