Pan-European investment and advisory firm Catella has appointed Gianluca Romano as head of capital raising. Having moved into the role at the start of the month, the former global head of indirect capital research for JLL will manage investor relations and strategic capital raising across all of Catella’s platforms, in addition to advising on new product development.
Romano’s hire reflects a push from the Stockholm-based conglomerate to globalize its institutional capital base – a tall ask at a time when many institutional investors are recalibrating their exposures due to the denominator effect.
“It’s been a tough capital raising environment for a while now,” admits Romano, who is based in London. “People keep saying, ‘in six months’ time it’ll be better,’ but they’ve been saying that for 12 months now.”
With a glut of opportunistic investment opportunities emerging, however, Romano is confident there is capital to be raised where the level of risk is a suitable match. And even if 2023 is another slow year, there is an opportunity to forge relationships and “do the prep work” for Catella’s new strategic direction, he says.
Indeed, one of Romano’s key objectives is to broaden the geographic reach of Catella’s capital base. Catella Group, which was founded in 1987, manages €13 billion in assets, but its investment management business was only established in 2015. “Catella has done very well to get to where it is today,” says Romano. But appealing to more investors, including in North America and Asia Pacific, is necessary to make “the next quantum leap in its evolution.”
“We plan to come out with more pan-European products that appeal to global institutional investors,” says Romano. “We’re also looking for more joint ventures, club deals and separate accounts.”
Catella has a debt advisory business, but Romano sees a potential opportunity to raise capital in the future to align with the increasing appetite for debt in the global institutional client base.
Romano also plans to tap the growing pool of capital from high-net-worth individuals targeting exposure to real estate. “This is not something Catella has done much of before,” he says. “We would need to create products that are specifically geared toward wealth managers’ distribution networks.”
Taking impact global
Among Catella’s high-conviction themes is residential build-to-rent. The firm is looking to invest opportunistically in markets including Denmark, Germany, Benelux, France, Spain, the UK and Poland by developing residential properties under its sector-focused impact strategy. The open-ended Catella European Residential III Fund, which passed the €1 billion milestone last year as per PERE data and is managed out of Catella’s Berlin-based Residential Investment Management arm, is labelled Article 9 under SFDR.
“The premium that you get for going green is expanding in Europe. In the not-too-distant future, green will be a necessary component of core,” says Romano.
Reconciling this focus on ESG with Catella’s plans to attract more investment from further afield could present a challenge in some geographies, however. “It can be very easy to make the case in Europe for ESG,” he explains. “But if you are going to the US right now, it’s a tougher sell.”
However, he thinks the evolution of the office market could change that. “Refurbishing ‘brown’ offices to ‘green’ is going to be a big part of what happens in the sector in this decade. Investors are realizing they need to be holding the office of tomorrow in their portfolios.”
Catella has refurbished office assets before, but Romano says the firm is looking to do more of this. “A lot of investors are coming to us to talk about it. It’s another high-conviction idea that we have, and we’re in discussions about the best way to structure that capital.”