Evercore is targeting significant growth on multiple levels for its real estate capital advisory platform.
One major step toward that goal is hiring of the senior members of the capital advisory group at Greenhill, led by Bill Thompson, who will now be co-chief executive of Evercore’s private capital advisory practice, alongside co-CEO Nigel Dawn, who launched the practice in 2015.
Among the Greenhill team are Thompson’s longtime colleagues, Manjul Ramchandani and Pamela Wright, who, along with Thompson, were founding members of the Credit Suisse Private Real Estate Fund Group prior to decamping together to Greenhill in 2010. Greenhill had seen a number of departures from its real estate capital raising team over the past several years, including Alok Gaur, Doug Kinney and Lee Purcell, all of whom joined The Carlyle Group before moving onto other firms, and Walter Stackler, who founded his own company, Shelter Rock Capital Advisors. Greenhill did not respond to a request for comment at press time.
With the lift-out of the Greenhill team, the investment bank has already seen the headcount of its real estate capital advisory unit, which is part of the now 45-strong PCA business, quadruple from five members to 20. The Greenhill team also currently is in the process of transferring its existing clients and business over to Evercore.
The scope of the platform also has broadened considerably with the merger of the two groups. “The business has changed so much,” Thompson said, in an interview with PERE. General partners, he said, are no longer just seeking to raise traditional commingled funds, but also are pursuing non-traditional fundraising methods such as asset and fund recapitalizations and joint ventures. For this reason, combining Greenhill’s traditional fundraising business and Evercore’s real estate advisory platform made sense.
“The combination of traditional and nontraditional fundraising businesses gives us the ability to talk to our clients and help them to do almost anything they need to do on the capital side or strategically,” he said. “A number of larger investors are investing more on a direct basis. That’s really the driver here in terms of being able to serve the needs of these investors.”
Evercore’s real estate capital advisory business, whose existing five members had all been based in New York, including Managing Director Tariq Khan, also has become a global platform with the addition of the Greenhill team, which spans eight markets globally across the US, Europe, Asia and Australia, noted Jarrett Vitulli, who leads the real estate advisory business within PCA. “We didn’t have anyone in Asia or Australia, so adding team members there just would be helpful to us in getting in front of more LPs and having a footprint where we didn’t have before,” he said.
Among the Greenhill team’s existing international clients are London-based Meyer Bergman, for which Greenhill advised on its third fund, Meyer Bergman European Retail Partners III, which raised €816 million earlier this year; Stockholm’s Areim, on which Greenhill worked on the real estate manager’s $450 million third fund, Areim Fund III, last year; and Hong Kong-based CLSA Capital Partners, which raised $1 billion for its opportunistic pan-Asian real estate fund, Fudo Capital III, in 2015.
The real estate capital advisory group is expected to further expand outside of the US. “We will add resources in Europe and Asia Pacific,” Thompson added. “We think we’re covering those markets pretty well right now but we think there will be additional opportunities. I think you’ll see expansion in those markets.” Currently, 25 percent of the group’s business is outside of the US, but he expects that the number could rise to 40 percent in the next two to three years.
The real estate capital advisory group also will work with related units at Evercore, including the private equity group led by Dawn, the real estate investment banking advisory practice led by Marty Cicco and the private funds group, which is led by Richard Anthony and is Evercore’s capital raising and placement business in asset classes outside of real estate.
With the secondaries group, for example, Thompson saw fundraising opportunities with the growing trend of stapled secondaries transactions. “There will be opportunities when managers recapitalize existing funds where they will staple on new commitments to that secondary offering,” he said. “It becomes an opportunity for the GP to raise additional capital.” However, he saw fund recapitalizations as a larger real estate opportunity for the firm than stapled secondaries.
Vitulli noted that stapled secondaries deals are currently more common in private equity than in real estate. However, “providing fund level liquidity solutions back to LPs, that’s something that has been accelerating materially over last 18 months,” he said. “Over the next two to three years, that will be a material growth area of the business.”