Mike Bryant and GE Real Estate both knew his debt skills would come in handy one day.
In the run-up to joining the US conglomerate in the summer of 2003, Bryant was busy originating loans at Europe's HVB Real Estate Capital (now Hypo International) for investors looking at participating in the booming UK property market.
But in the knowledge that the real estate market would one day reverse, GE Real Estate poached him. For the next four years he concentrated on investing equity in real estate in Europe. Now Bryant has been given a chance to return to his debt roots in a newly created position as managing director of international debt.
While remaining in London, Bryant will oversee teams operating across Europe and Asia to invest in performing commercial loans.
Commenting on the role, Bryant told PERE: “GE sees fantastic opportunity to grow the property lending book.”
He explains that in North America, GE has always had a substantial property lending business because it has found opportunities to match its return thresholds. For the past decade in Europe and Asia, that has not been the case. “We have not liked the pricing of the market,” he said. “But the world has changed.”
On the same day that Lehman Brothers filed for Chapter 11 bankruptcy (September 15), Bryant said GE saw “fantastic opportunity” for growth at a time when a lot of the competition wasn't currently operative in the market.” He argued: “Either we will have the chance to buy loan books from them or step in to write new direct loans.”
GE recently restructured its Europe and Asia real estate operations by combining them under GE Real Estate International. Operating within that business, Bryant is leading a “central debt office” of around 10 professionals to “sit above” other debt professionals at the company's network of offices throughout Europe and Asia. Bryant says he will be co-ordinating strategy and oversee large investments as well as building out the platform. Members of the debt operation will be based in each of the countries GE operates in, which consists of offices in the UK, France, the Nordics, Germany, Iberia, Central Europe and Italy. In Asia, GE has a presence in Japan, Singapore, Korea and Australia.
Over the past year, Bryant says Japan has been a big market. It has made $1 billion worth of performing loan investments in Japanese assets. But in Europe it has been even more active. In November 2007, GE acquired €2.7 billion ($4.1 billion) of loans from UK mortgage company Bradford and Bingley, followed up in April with a €1.3 billion package from Capmark Europe and then a €642 million loan book in July from Credit Suisse. Bryant, it seems, will be very much at home in his new role.
JER taps GE, Merrill Lynch
JER Partners has taken on Chester Barnes, former head of asset management in Europe, the Middle East and Africa at Merrill Lynch Global Principal Investments based in London. Barnes joins JER from newly taken over Merrill Lynch to become managing director and head of European asset management. He will report to European head Malcolm Le May. Virginia, McLean-based JER Partners has been on a recruiting spree in Europe. Last month, it revealed it had poached a new Central and Eastern Europe team from GE Real Estate. JER, which under former GE Real Estate head Michael Pralle is growing its business around the world, hired Karim Habra, Christopher Zeuner and Petr Kosar to establish a platform in the region.
HSBC makes Morrell head of fund of funds
HSBC Global Asset Management has appointed Guy Morrell as head of its multi-manager business for the UK and Middle East North Africa. James Hughes, who previously held the post, is to be relocated to Hong Kong to become head of multimanager Asia Pacific. Morrell joined HSBC in 2004 and runs the global real estate investment team and the Open Global Property fund. According to the firm, he will continue to report to chief executive of HSBC Multi Manager, Joanna Munro. He will also continue to head the seven-member global real estate team. According to the bank, HSBC Global Asset Management's multi-manager team had $32.8 billion assets under management as of June 2008.
Terra Firma exec joins WP Carey
A director at Guy Hands' private equity firm Terra Firma is quitting his post to become managing director of sale and leaseback specialist WP Carey. Tom Quigley, a 20-year veteran of corporate finance in London, will serve as head of the US firm's London office and will be primarily responsible for generating and executing its investment activity in Europe, the firm said in a statement. The former managing director at ING Barings bank and head of hospitality, leisure and retail advisory group at Close Brothers Corporate Finance joins WP Carey as it expands into Europe. It recently opened an asset management office in Amsterdam.
Robert Houston named ING chief
ING Real Estate has appointed Robert Houston as chairman and chief executive of its global investment management business. Houston replaces David Blight who resigned in June to return to Australia for family reasons. Other changes taking place at ING Real Estate include the promotion of Stephen Pyne, currently UK chief investment officer, as global portfolio manager responsible for global cross-border investment. Kevin Aitchison, currently head of the UK's segregated account and joint venture business, succeeds Houston as chief executive of the UK business, though Houston remains chairman. ING has around €72 billion of assets under management.
Cordea postpones €400m Turkey fund
Cordea postpones €400m Turkey fund London-based Cordea Savills has postponed its €400 million Cordea Savills Turkish Property Ventures fund. The opportunistic vehicle, launched in April, promised 20 percent-plus returns in the country, which is outside the European Union. It pointed to Turkey's “fast expanding economy” as a reason to invest in development, primarily shopping malls and residential property. However, the firm has experienced less demand than anticipated for the vehicle since then. A spokeswoman confirmed that the fund was now not being raised, and added it had been the only fund Cordea Savills had planned for this year.
UFG raising second Russia fund
Moscow-based asset management firm UFG Asset Management is raising its second Russia property fund. The firm is hoping to raise $300 million for URG Real Estate Fund II and is expected to close in November. The firm's first fund targeted $250 million. The fundraising comes as the firm sold its Russian mutual funds business to Deutsche Bank. At the time of the deal last month, UFG said the current market dislocation would help its private equity and real estate funds, which remain untouched by the Deutsche Bank transaction. The firm's first real estate fund recently sold four assets for an aggregate net IRR of 71 percent.
HDG Mansur in $200m Europe, US fund push
HDG Mansur is embarking on a major fund raising program hoping to raise $200 million for the HDG Mansur International Property Fund for investing in both Europe and parts of the US. This is in addition to a separate US opportunity fund looking to garner $350 million. The International Property Fund plans to invest in a diversified portfolio of properties including in the UK, Germany, the Netherlands, France, Switzerland and Nordic countries. The firm said the vehicle was similar to the $2 billion HSBC Amanah Global Properties Income Fund launched in 2002 which invested in single and multi-tenant properties leased to major corporations with stable or improving credit.
Germany set for ‘above trend’ growth
The German real estate market is expected to deliver “above-trend” growth over the next five years despite fears the economy will be impacted by the credit crunch, according to a report by Invista Real Estate Investment Management, a listed UK fund manager. Its European quarterly investment report said investors should look beyond the short-term volatility of the property market and concentrate on larger, longer-term issues of economic growth, liquidity and performance. It concluded that Germany was “well positioned” to deliver above-trend growth over the next five years, benefiting from tax and labor market reforms, improvements to productivity and competitiveness, and the relaxation of immigration laws to alleviate skills shortages.