Former Presidio Partners founders Jack Berquist and Desi Co have teamed with Mesirow Financial’s Jeff Sobczynski to start Accord Group, a private equity real estate firm that will focus on emerging investment strategies in the US and abroad.
Most recently, Berquist and Co were managing directors at Macquarie Capital’s private real estate capital markets business, focusing on capital-raising efforts globally. The two men were co-founders of Presidio Partners, a private real estate capital-raising and advisory business that raised $12 billion over seven years and that they sold to Macquarie in 2010. Co had been managing Macquarie’s European private real estate capital markets business, but left the firm at the end of September after deciding not to permanently relocate to London for family reasons. Berquist departed late last month.
Sobczynski, meanwhile, previously was a senior vice president at Mesirow Financial and part of the firm’s institutional real estate multi-manager team, headed by senior managing director Joshua Daitch. After a five-year tenure at Mesirow, he resigned his position late last month to help start Accord.
Sobczynski, who is based in Chicago, will oversee the new firm’s investment business, which will pursue value-added and opportunistic strategies through fund of funds and other vehicles. He will be responsible for the business’ day-to-day operations and executing and underwriting investments, while Berquist and Co, who are based in San Francisco, will focus on capital raising and overall strategy formation for Accord.
“We like more niche, emerging strategies that aren’t particularly well followed by institutional capital right now, but will be soon,” said Co in an interview with PERE. Accord plans on raising a series of vehicles targeting emerging strategies in the US and other developed markets, emerging markets beyond the BRIC countries and emerging or “re-emerging” managers.
In Co’s view, one emerging strategy in the US is for-sale housing, involving traditional homebuilding on land lots. Accord is believed to be raising capital for the strategy and is close to investing with its first manager in the space. “The housing recovery is becoming clearly more robust, and the supply/demand conditions are extremely favorable,” with inventories of less than six months in certain coastal markets, he said. “That’s a market where you can see the market has clearly turned.”
As part of Accord’s investment business, the three managing partners also are considering merchant banking opportunities that would involve recapitalizations of general partners. Additionally, the firm plans to establish an advisory business, providing services to both fund sponsors and limited partners.
Accord would be the second multi-manager venture for Co and Berquist, who together formed Compass Equity Advisors in 2006. That firm, however, had an ex-US mandate, raising two fund of funds vehicles that invested across Europe, Asia and Latin America. Compass targeted $25 million in capital for its 2006 fund, Compass I, but ultimately attracted $45 million. The vehicle's blind-pool investments included commitments to IL&FS India Realty Fund II, CBRE Strategic Partners UK Fund III and Forum Asian Realty Income II. In 2009, Compass collected $15 million after restructuring the blind-pool successor fund, Compass II, with pre-specified investments of $7.5 million each to Paladin Realty Latin America Investors III and Threadneedle Strategic Property Fund IV.
Accord plans to raise vehicles that are at least as large as the Compass funds, bringing in capital from both high-net-worth and institutional investors. At press time, Co said there were no immediate plans to expand the Compass fund of funds business.
Berquist and Co began working together as part of Banc of America Securities' private equity real estate group. That team, which Berquist managed and established, raised more than $5 billion in equity from 1997 to 2003. In 2003, the pair, along with Alan Braxton and Markus Trice, left BofA to start up Presidio Partners and later created Compass Equity as a separate business in 2006. After the sale of Presidio to Macquarie in 2010, the four partners became employees of the Australian company but were allowed to retain their ownership interests in Compass.
Berquist and Co first became acquainted with Sobczynski about four years ago, when Mesirow and Compass invested in a number of different funds together. Also, in their capital-raising roles at Presidio, the pair introduced Sobczynski to a fund in which Mesirow later invested.