The duo that led Eurohypo’s property investment banking division have orchestrated a management buyout of the German bank’s commercial real estate asset management business.
Paul Rivlin and Neil Lawson-May had hoped that Commerzbank-owned Eurohypo would back them in a separate private equity real estate venture, but were left disappointed when the bank decided not to do so. Instead, they have bought out Eurohypo’s property asset management business which includes two funds with more than £550 million (€689 million; $1,089 billion) of assets for their new platform Palatium Investment Management. Eurohypo Asset Management manages the Greycoat Central London Office Development LP, which is a £250 million central London office investment fund managed on behalf of Greycoat Estates and Glastonbury Finance 2007-1, a £355 million cash flow commercial real estate collaterised debt obligation.
At Palatium, the pair are launching a suite of funds in the next 18 months, all with the common theme of taking advantage of distressed situations in Europe. According to a statement, the first will take advantage of the current market conditions in the preferred equity and mezzanine debt markets.
Lawson-May said: “Despite, and in some cases because of, current market conditions, there are still a number of truly exciting investment opportunities in real estate and real estate debt. Palatium will pursue these in the years ahead to offer investors opportunity returns in a variety of the world’s real estate markets. The key factors will be our ability to identify clearly defined opportunities and manage them successfully.”
Rivlin added: “It is apparent that many institutional investors are still active in the real estate market and share our view that there are very real opportunities to create above average risk weighted returns.”