Edward Bates leaves as Co-Head of Doughty Hanson real estate

Edward Bates parted company with the London-based private equity firm at the end of last year. Julian Gabriel has assumed the role as sole head of Doughty Hanson Real Estate.

Edward Bates, co-head of real estate at London-based mid-sized private equity firm Doughty Hanson & Co has left, PERE has learned.

The dealmaker, who joined the firm in 2007 after spending almost a decade at Orion Capital Managers, departed at the end of last year.

In response, Doughty Hanson has appointed fellow co-head, Julian Gabriel, as the man to take sole charge of the platform, insiders said.

Bates has left as the firm progresses the pre-marketing of its third fund, Doughty Hanson Co European Real Estate Fund III, with a target of approximately €400 million.

He is the third high-profile figure at Doughty Hanson Real Estate to leave since it was established in 1999. Previous head of real estate, Marc Mogull quit in 2005 to start rival, Benson Elliot Capital Management. John Howard then stepped back from the business as head of real estate, prompting the firm to appoint Gabriel and Bates as co-heads of the business. At the time, Bates’ hiring was seen as an attempt to reinvigorate the platform.

Those with knowledge of the firm suggest that a difference of opinion with senior management over the management of Fund III and the real estate platform led to his departure.

Doughty Hanson sealed its status as a significant mid-sized opportunity fund manager in December 2006 when it closed its second fund, Doughty Hanson Co European Real Estate Fund II, on €560 million of commitments.

That fund is projected to deliver between 1.2x and 1.4x equity.
In the firm’s 2009 annual review, Bates wrote that a major theme for Doughty Hanson Real Estate in 2009 had been the mitigation of risk.

The firm made one real estate investment in 2009 – a UK shopping centre. Since then, it has announced a key hiring, an exit and some fresh acquisitions. In November it hired former HSBC head of real estate finance, Robert Farquharson, as a principal in London. Two months earlier, it announced the sale of a 75 percent interest in Real Estate Metronom, a development site in the Czech Republic for which it won planning consent. Together with the €89.5 million sale of an adjoining office park, the €8 million sale provided investors in Doughty Hanson’s Fund I with a 6.64x equity multiple.

In the summer of 2010, the firm also announced it had acquired the research and development headquarters of Swedish car manufacturer Volvo in Gothenburg for Fund II.