Blueprint: BlackRock’s continued reshuffling, ESR’s latest Vietnam expansion, LGIM’s US platform launch

BlackRock makes further leadership changes, promoting its EMEA head to a global chief investment role; ESR continues expansion in Vietnam via a $450 million funding round for a local industrial developer; LGIM opens its US real estate business with initial plans for balance sheet investing; and more in today's briefing, exclusively for our valued subscribers.

They said it

“When someone calls with $4 billion of capital, you answer the phone”

Nadeem Meghji, senior managing director and head of real estate Americas of Blackstone, told PERE last week about the firm’s significant investment from UC Investments, the $152 billion endowment of the University of California. Read the full interview here.

What’s new?

Big promotion: New York-headquartered BlackRock elevated its head of EMEA real estate Paul Tebbit for the second time in a year, this time to global chief investment officer of core real estate.

Further reshuffling at BlackRock
If you’re an avid reader of Blueprint, you’ll be familiar with the multiple senior leadership changes BlackRock Real Estate has made over the past year. Now the world’s largest asset manager has further reshuffled its senior property executives as it gears up for what head of infrastructure and real estate Anne Valentine Andrews calls “the second stage of evolution” for the platform. The most high-profile of the leadership changes is the elevation of Paul Tebbit to global chief investment officer of core real estate, overseeing BlackRock Real Estate’s newly formed global core equity platform. Tebbit, as you may recall, was promoted from chief investment officer for BlackRock EMEA Real Estate to head of EMEA real estate just last June. To learn more about the team updates, which involve five other senior executives at BlackRock Real Estate, check out our coverage here.

ESR beefs up presence in Vietnam
Asia logistics powerhouse ESR has acquired a strategic equity stake in Vietnam’s BW Industrial Development as part of the former’s broader plan to grow its exposure in the country. The Hong Kong manager’s investment is part of a $450 million primary funding round for BW which involved other Asian investors, according to an announcement. Following the transaction, Fion Ng, ESR’s head of investment and development for Southeast Asia, will become the chief operating officer at BW. ESR will also provide strategic guidance and share resources to facilitate the growth of the BW platform. ESR and BW first joined forces in 2021 where the two formed a development joint venture for My Phuoc 4 project in Vietnam. That project marked ESR’s entry into the country.

LGIM moves across the pond
Five years after London-based Legal & General Investment Management launched its first US business in private credit, the investment arm of the insurance and pension advisory firm is expanding to US real estate. Anchored by two hires from Aegon Asset Management’s US real estate business, LGIM’s newly minted US real estate equity platform will make investments from its balance sheet in its inaugural year. However, the firm plans to expand its capital base to third party sources in 2024 and beyond by launching a series of yet-to-be-determined products, global CEO Bill Hughes told PERE. The firm will target multifamily and industrial alongside life sciences, which is the focus of an up to $4 billion joint venture with US developer Ancora in October. “We think entering the market in a material way in 2023 is great timing,” Hughes said, referring to potential opportunities that are expected to emerge from the market dislocation. Read our full coverage here.

Tristan’s fundraising milestone
One of Europe’s top real estate managers, Tristan Capital Partners, has reached a final close on the sixth fund in its value-add/opportunistic ‘EPISO’ fund series. With around €2 billion secured, the London-based firm’s European Property Investors Special Opportunities 6 is the largest vehicle yet in its series, and represents one of the largest Europe-focused real estate funds closed in the past year. The fund attracted commitments from more than 20 new and existing investors, according to an announcement. EPISO 6 targets 12-14 percent returns from investments in the office, logistics, residential, hospitality and life sciences sectors. Investments thus far include the acquisition of budget boutique hotel brand Point A Hotels in April for £420 million ($519 million; €480 million) and a €240 million portfolio of residential assets in Leipzig in a joint venture with German asset manager Lübke Kelber, which was announced last week.

Trending topics

From last to first
For much of the past cycle, investors in industrial real estate have been focused primarily on last mile logistics. According to global real estate consultant Knight Frank’s 2023 Future Gazing report, the focus is set to shift to ‘first mile,’ which is defined as the point in the supply chain where the movement of finished goods from a manufacturing hub to its first warehouse or distribution center. This subsector is set to become the next opportunity in logistics in part because the assets typically offer higher yields than last mile logistics, the report states. There is also more scope for combined infrastructure and real estate investment due to the assets being close to ports, airports and freight terminals. Major market participants have already begun gearing up to take advantage, with New York-based Cerberus Capital Management forming a joint venture with industrial specialist ALMCOR to build a €1.5 billion portfolio of assets across Europe last year.

ARCH jumps on the digital bandwagon
Hong Kong-headquartered ARCH Capital has become the latest real estate firm in the region to tap into digital infrastructure with the launch of a new platform. ARCH president Charles Cosgrove and Keppel Data Centres’ former head of M&A and strategic initiatives Kai Goh have co-founded Digital Halo which will acquire, develop and operate digital infrastructure assets, including data centers and renewable power systems across Asia. Currently, the platform is planning its first data center project in Manila, Philippines. Apart from Arch Capital, APAC real estate firms such as SC CapitalGaw Capital Partners and PAG have all launched their own digital infrastructure platforms targeting the emerging opportunities in the region.

Data snapshot

Varying degrees of decline
An early look at Q3 data for the private markets shows a wide variation in transaction volume declines among sectors and markets globally. For example, year-on-year volumes dipped by 8 percent in APAC but plummeted by 46 percent in the EMEA region during the quarter, according to Houston-based Hines’ Global Outlook: Navigating the Labyrinth 2023 report.

People moves

Fifth Wall materializes Asia ambition
Proptech heavyweight Fifth Wall is expanding into Asia-Pacific with the opening of its first office in the region. The firm has hired Yvonne Voon [her LinkedIn here], former head of group capital raising at logistics property specialist LOGOS, to lead its APAC business and set up its new Singapore office. Prior to LOGOS, Voon spent 14 years at Credit Suisse where she was most recently the head of Southeast Asia real estate, investment banking and capital markets. Brendan Wallace, co-founder and managing partner at Fifth Wall, is hoping to replicate in APAC the success that the firm has achieved in North America and Europe. “As the largest and most active built world technology investor across North America and Europe, Fifth Wall has long had ambitions of expanding into Asia,” he said. The move comes after the firm raised more than $1.5 billion across three fundraises in 2022.

Investor watch

CBRE IM’s new Income source
CBRE Investment Management has taken over the management of Income Insurance’s $3 billion global real estate portfolio, which comprises direct and indirect holdings across Asia-Pacific, North America and EMEA, the firm said in its announcement of the new mandate. After diversified financials, real estate represented the second-largest asset class for the Singapore-based composite insurer, accounting for 41 percent, or $2.8 billion, of its overall investment portfolio in 2021, according to Income’s 2021 annual reportPERE’s database shows Tristan Capital Partners’ European Property Investors Special Opportunities 3 and 4 and Frogmore’s Frogmore Real Estate Partners III among Income’s prior real estate fund commitments.

This week’s investor meetings

Wednesday, January 18

Thursday, January 19

Friday, January 20