DTZ’s Asia investment management team spins out

The Hong Kong-based team led by David Schaefer has reformed as Bay Capital Partners while DTZ looks for alternatives to launching a “maiden fund”.

DTZ's real estate investment management platform in Asia has spun out and has launched a boutique firm.

DTZ Capital Partners was formed in March 2010 with the hire of ex-Citi Property Investors (CPI) Asia head David Schaefer and went on to launch fundraising for a debut fund called Aveny Asia Real Estate Partners in November that year.

Schaefer led a four-strong team based in Hong Kong, however the platform’s activities were hampered as DTZ became subject to a takeover in the face of mounting financing issues. Following a somewhat protracted period of uncertainty, the firm was eventually acquired at the end of December by Australian engineering, property management and maintenance firm UGL in a transaction valued initially at £77.5 million (then €90.2 million; $121.3 million).

After stabilising the business, UGL re-launched the fund but increasingly challenging fundraising conditions during the first half of this year led to the decision by the firm and Schaefer’s team to part ways.

UGL’s group president Robert Shibuya told PERE that DTZ remained committed to growing its investment management business generally and that Asia would be part of that growth. He said: “We are committed to [DTZ’s] investment and asset management services. Our focus will now be to look at alternatives not only in Europe but ultimately in Asia and the US. It is more likely that what we do will have to do with a strategy that is part of an existing platform rather than a maiden platform.”

He further explained: [DTZ Capital Partners] was a start-up to create a fund which was initiated prior to us acquiring [DTZ]. In effect, it was a maiden fund which we decided to support and re-launch.”

“We watched the fundraising activity very closely and it became fairly evident to us after watching for seven or eight months that there were headwinds that we were fighting against due to the macroeconomic environment. It was a good strategy but we kept hearing the maiden fund concept would be challenging in the current economic environment.”

Schaefer has now formed a new real estate investment management platform based in Hong Kong called Bay Capital Partners, bringing with him two of his three ex-DTZ colleagues, Jason Lee and Michael Moon. It is thought this platform will look to re-launch a version of Aveny Asia Real Estate Partners although the name is expected to be different.

DTZ had planned to raise $400 million for the eight-year vehicle with the aim of investing predominantly in the office markets of Asia’s gateway cities of Hong Kong, Taipei, Seoul, Beijing and Shanghai although investments in Singapore were also in its remit.

Schaefer declined to comment.