Capital Dynamics expands RE division as Pacific Star Europe winds-up

Capital Dynamics, the Switzerland-based alternative assets investment business, is set to grow its real estate division following the appointment of Matthias Sturmer from defunct Pacific Star Europe.

Capital Dynamics only entered into real estate investing via its April 2009 takeover of HRJ Capital, the private equity fund of funds management business, inheriting $2.2 billion in assets under including a fund of funds team and vehicle in the US.

Its ascent in property investing has now been given a further boost by the winding up of the European division of Pacific Star, the Singapore-based real estate investment firm.

Sturmer, who was a co-owner of  the business  alongside former Allianz real estate head Dirk Grosse-Wordemann, has joined Capital Dynamics as co-global head of real estate, and will lead the firm’s expanding five-strong real estate team alongside fellow co-head Howard Feilds. In addition, Sturmer will assume the role of head of Europe.

PERE has learned that, among his first tasks, will be to establish a real estate fund of funds in Asia. The vehicle, which is yet to be given a fundraising target, is expected to offer European investors with access to Asia real estate via underlying funds. It will be managed out of Capital Dynamic’s Hong Kong office, for which Sturmer is expected to locate more staff.

Sturmer formed Pacific Star Europe with Woerdermann in 2008. The partners took a 49 percent stake in the business with Pacific Star assuming 51 percent. Similar to the plans of Capital Dynamics, Pacific Star Europe was created as a conduit for European investors to invest in Asia real estate. The firm attempted to raise a global fund of funds on its own books as well as raise capital for Pacific Star’s Asia vehicles. However, the firm never held a final closing of its own and at the end of last month, closed operations. It was unclear at press time what Woerdermann was to do next.

A spokesperson for Pacific Star said: “Both Pacific Star Europe (a joint venture with Dr Sturmer and Dirk Woerdermann) and Pacific Star Group arrived at a strategic business decision to close the Pacific Star Europe operations, effective 30 September 2010. The partners also expressed their desire to move on to pursue other interests, which the group respected. Pacific Star Group is selective with regards to whom we partner, as a result a decision was made not to keep the European physical operations running. The Group’s investors will continue to be served from Singapore and the rest of the Asian regions. We will also continue to focus on successful direct investment opportunities into Asia.”

Last week, PERE revealed that Pacific Star would amalgamate two real estate funds previously in fundraising mode, into one. The Pacific Star Asia Fund IV – Asia Fund Select is expected to attract $1 billion in commitments by offering investors a two-pronged investment strategy. Investors can either invest via a pan-Asia fund or through sub regional funds within the vehicle. That fund will be marketed during this quarter.