BoAML’s global real estate principal investment head leaves

Douglas Sesler has left his position as head of global real estate principal investments at Bank of America Merrill Lynch (BoAML) after overseeing the wind down of the once-$8bn platform to near conclusion. His departure comes in the wake of the bank’s recent disposal of its platform businesses in Asia and Europe last year.

Sesler told PERE he would spend a short period of time on sabbatical, but he is keen to assume another senior role in real estate principal investments shortly. He said: “I’d expect to be in the real estate principal space, but I’m thinking about a number of situations. It could be an operating business or a fund and asset management platform. Both are situations I’m looking at.” Sesler informed close colleagues about his decision to leave last month.

Sesler was appointed to the position from his role as co-global head of real estate banking in January 2009, immediately following Bank of America’s merger with Merrill Lynch. His role to wind the business down followed an agreement between him and senior bank executives, including Bank of America’s chief financial officer Joe Price. At the time, the global business managed approximately $8 billion in equity positions, funds, separate accounts, joint ventures and the bank’s regional balance sheets.

BoAML’s exit of the Asia component of its principal investments business, which accounted for approximately $4 billion of the equity under management, was a workout that dominated PERENews.com over the past two years. Initially, the bank explored a sale of the management business, much of which was managed in BoAML’s$2.65 billion Asian Real Estate Opportunities Fund.

A bidding process culminating in a final shortlist of ING Real Estate Investment Management and LaSalle Investment Management ensued until, at the end of the year, it fell apart after the threat of litigation from the fund’s LPs. Central to their complaint were actions taken by the bank considered non-fiduciary but, last August, their grievances were appeased after BoAML offered them a settlement valued at around $650 million. As part of the deal, the management of the fund and other Asia assets was passed to The Blackstone Group, which took on almost half of the bank’s 60-strong Asian team.

Sesler also oversaw the management buyout led by Roger Barris of BoAML’s smaller European platform, which managed the €261 million Merrill Lynch Real Estate Opportunity Fund, the €204 million Bosphorous Real Estate Fund I and other assets. He also arranged the succession management of BoAML’s Latin America real estate equity interests, which were managed in various joint ventures.

“If you take Roger’s business and Blackstone’s business, they have become the GPs of the funds in those regions as well as the separate account managers for our balance sheet assets,” Sesler said, adding that a small team has remained at BoAML to continue managing out residual assets. “The business is rapidly winding down,” he added, “although there’s a small group of people in New York that will be there longer term.”