In the current global environment, no one quite knows where capital will be coming from or how a firm should best grow as a business. Therefore, it comes as no surprise that some firms are deciding to create specific roles to deal with this.
In the last few weeks, there have been several instances of firms appointing ‘global heads of business development’. AXA Real Estate and MGPA are two cases in point, respectively naming Deborah Shire and Neil Jones to the role.
The title of business development director is not, of course, something entirely new. However, real estate professionals point out that some firms feel this is necessary if they want to continue to grow.
In the old days, it would be assumed that business development was really just a fancy way of talking about a capital-raising function. That still might hold but, as the recent appointments show, the role has expanded latterly to include other functions as well.
In this more uncertain world, a global head of business development might be expected to assess all the rules and regulations coming down the track that might present either an opportunity or a threat. He or she also might be expected to analyse possibilities for consolidation. In other words, identifying any existing platforms out there that could be taken over in order to provide growth. Thirdly, the role could encompass scouting the world for investment partners, or those willing to infuse the firm with long-term capital, to ensure operations for years to come.
Sometimes, the role might not even be called ‘business development’. It could be ‘global capital markets’, a la the newly created position at LaSalle Investment Management for Jon Zehner. He is responsible for overseeing global capital raising, as well as new product development, merchant banking and cross-border investments with partners.
The most noteworthy common thread, though, is that these newly created roles are global. As private equity real estate has become such a cross-continental activity, firms need to be prepared to form tie-ups or relationships with parties from anywhere in the world.
Regardless of the connotations – whether the position means ‘capital-raiser’, ‘product developer’ or a variation of the two roles – a number of firms are getting wise to the fact that merely fundraising, no matter how robust or aggressive, simply isn’t enough. They need to have established plans for what to do with the capital raised, how to tailor and develop their products, how to customise their funds and how to maximise profitability on their investments.