Change comes to all things and it has been underway recently at large global insurance companies looking to expand their alternative investments business.
Aviva Investors – the new name of the asset management division of insurance company Aviva plc – has been one of those actively growing its real estate capabilities. Ed Casal, chief investment officer of Aviva's global real estate multi-manager group, said its rebranding effort was an attempt to unify Aviva's business around the globe. (The unit had previously been known as Aviva Capital Management in the US, and Morley Fund Management in the UK).
However, it's not just about rebranding Aviva. The firm has also been positioning itself to take advantage of the credit crunch, particularly in the US – hiring veteran real estate writer Steve Felix to market its multi-manager business in North America in a newly-created role.
Casal said the move was timely given the opportunities set to emerge over the coming months and years in the US, adding that Aviva was “anticipating” offering its real estate multi-manager and fund of funds products to its US clients including its Canadian customers.
Felix's connections will no doubt come in handy in his new role. As the former managing director of the Institutional Real Estate Letter, author of the column “On the Road,” and guest commentator on www.privateequityrealestate.com, Felix is a wellknown face in real estate circles. As marketing head for Aviva's North American base, he will work with the global multi-manager real estate team, including its fund of funds group, to build investor relations and promote funds. A job Felix said would entail “raising the visibility” as well as introducing the Aviva Investors brand in North America to institutional investors and potential managers, and ultimately raising money from institutional investors.
The latest developments at Aviva follow on the heels of other changes for the firm earlier this year – in particular, integrating New York-based fund of funds manager, Madison Harbor Capital, into its real estate multi-manager team at London-based Morley Fund Management in April.
Aviva though is not the only insurance giant that has been expanding its alternative investment capabilities. Others, including Prudential Real Estate Investors – the property investment arm of insurance company, Prudential Financial – have been slowly accumulating human capital. New Jersey-based Prudential last year acquired Japanese real estate management firm Round Hill Capital Partners, expanding its business in the country. Meanwhile in Europe, German insurer Allianz appointed former BlackRock executive Matthew Ryall earlier this year as group head of fund selection in Europe, and is also creating a global real estate investment platform under subsidiary, Allianz Alternative Assets. Axa is also growing its real estate investment management arm, as reported in our Blueprint interview on p. 28.
Despite what has been happening with battered investment banks (and the fate of their alternative asset management arms), it seems global insurers have been quietly sidestepping the mess and mayhem. Well, unless your acronym is AIG.
South American ventures
Boston-based Taurus Investment Holdings is opening an office in Lima, Peru, to develop residential, retail and office property. Keith Rapp, a Lima-based former financial consultant, is heading up its business in the country as managing partner. Taurus recently opened an office in Prague.
Internal accounting for CBRE
CBRE Investors has hired former GE Real Estate chief financial officer, Shaun O'Connor, as its new chief financial officer for the firm's US and European units. O'Connor was also previously with American International Group and IBM. He will head CBRE's corporate finance, reporting and accounting operations.
Among the wealthy
Stephen Schwarzman and Sam Zell were named as the richest private equity real estate investors in the US, according to the Forbes 400 list of the richest people in America. The founders of The Blackstone Group and Equity International had an estimated personal wealth of $6.4 billion and $5 billion respectively.
Jumping on the bandwagon
ING Real Estate has named Florencio Beccar as head of its new operation in Brazil to spearhead activities in the region. Beccar established ING's Italian team and led an acquisitions team in Spain. Brazilian native Marcela Drigo is joining Beccar in the Sao Paulo office as a vice president.
Investcorp targets debt
Investcorp has hired Christopher Hoeffel, former managing director at JP Morgan, to join the firm as a managing director in its US based real estate team. The Bahrain-based investor recently launched a $1 billion real estate debt vehicle, which Hoeffel would be involved in investing.
New York evolution
Dubai government-backed private equity firm Istithmar has opened an office in New York following the opening of a Shanghai office last year. The New York office was a “natural evolution” of the firm's presence and asset base in the US and Canada.
The former chief executive officer of US drug store chain Duane Reade, acquired for $750 million in 2004 by Oak Hill Capital Partners, has been indicted on fraud charges for allegedly providing false information to Oak Hill during the acquisition. Anthony Cuti and former Duane Reade chief financial officer William Tennant were charged with misrepresenting company expenses and earnings.
Expansion plans for CS
Credit Suisse has hired former RREEF client relations managing director Susan Swanezy to spearhead the future development of DLJ Real Estate Capital Partners. Swanezy will join as head of distribution within Credit Suisse's Real Estate Products Group, a role specially created by the investment bank.