Cerberus Capital Management’s property business will undergo its second leadership change in as many years when Ron Kravit, co-head of US real estate investing, steps down at the end of the month.
Kravit, 61, who joined the New York-based alternative investment manager in 1996, was described as “one of the main reasons we invested with Cerberus” by an investor that committed to the firm’s latest vehicle, Institutional Real Estate Partners V.
“We have a close working relationship with Ron, and he is a great partner and investor,” the source, a US pension fund, told PERE. “We were made aware some time ago that he was planning to retire – before Cerberus went to market with CIREP V. We have had the opportunity to get to know [Cerberus head of global real estate] Lee Millstein over the past couple of years and feel confident in his abilities to lead the team.”
After stepping down at the end of the year, Kravit will serve in an advisory role for both Cerberus’s real estate business and the family office of the firm’s founder, Stephen Feinberg.
Tom Wagner, who joined Cerberus in 2006 and has served alongside Kravit as co-head of US investing for nearly four years, will now be the sole leader of the team. He will continue to report to Millstein, who took the reins of Cerberus’s real estate platform last year.
Kravit’s departure follows a reshuffling in Cerberus’s real estate business last year. In spring 2017, Millstein, who previously ran the firm’s European and Asian distress/real estate investments, was promoted to the newly-created head of global real estate position. At the same time, Ron Rawald, then-head of European real estate, was put in charge of international real estate and replaced in his previous position by Daniel Dejanovic.
During his tenure, Kravit oversaw Cerberus’s push to become one of the largest retail owners in the country, with major acquisitions that included Mervyns, a discount chain, and Albertsons, a grocer. Supermarkets became something of a specialty for the long-time real estate executive, as the firm scooped up Safeway, Acme, Jewel-Osco, Shaw’s and Star Market, as well as their real estate holdings.
Kravit, along with Millstein, Rawald and Wagner, also helped the firm emerge from the global financial crisis relatively unscathed by shedding assets and scaling back on new investments at the top of the market.
In January 2017, Cerberus raised a total of $1.8 billion for its largest-ever global opportunistic real estate fund, the $1.8 billion Cerberus Institutional Real Estate Partners IV. On behalf of CIREP IV, Cerberus will primarily target highly complex or distressed real estate equity and debt transactions where competition is limited. The firm will seek to invest roughly half of the fund’s capital in the US and the remainder in western Europe, according to minutes from the San Francisco Employees’ Retirement System, an investor in the fund.
Before joining Cerberus, Kravit was a managing director at Apollo Real Estate Advisors from 1994 to 1996, where he was in charge of new business development, acquisitions and asset management. Prior to that, he was a managing director at Soros Fund Management from 1993 to 1994.
Wagner, meanwhile, arrived at Cerberus in 2006 after an eight-year stint at GE Real Estate, where he rose to the position of managing director. He served as chief operating officer of Cerberus’s real estate business before being named US co-head in January 2015.
Founded in 1993 as Blackacre Institutional Capital Management, Cerberus Real Estate has deployed $26 billion of equity in 560 transactions in the US and Europe.