Daniel Gorzawski, formerly the head of Europe at Chicago-based manager Harrison Street, has launched his own firm, Westwind Capital, PERE has learned.
With a pan-European focus, the London-based private equity real estate firm will target the region’s life sciences, innovation and living sectors, including purpose-built student accommodation, build-to-rent as well as the more nascent strategies of microliving and co-living.
“I believe that the asset classes that Westwind is targeting represent immature and fragmented markets in Europe,” Gorzawski told PERE. “We see structural undersupply, we see strong demographic growth drivers, following mega-trends like globalization, urbanization and some of the societal changes that we’re seeing, especially in Western Europe.”
Geographically, Westwind will be focused primarily on the UK, Ireland, Germany, Spain and France, but will also look at the Netherlands and the Nordics, with an anticipated 50-50 or 60-40 split in favor of continental Europe. The first investments are expected to close this summer, with the most imminent deals in Spain, the UK and France.
Gorzawski declined to comment on fundraising, but PERE understands that the firm is working with a partner to provide significant capital for the most imminent transactions in its pipeline. Westwind also plans to raise discretionary vehicles over the long term.
Pursuing a value-add and opportunistic strategy, the firm will target deal sizes ranging from €20 million to €40 million for student housing and €50 million to €150 million for life sciences and build-to-rent.
“We’re really aiming to build properties one by one and then build portfolios so we get operationally more efficient but also achieve a certain scale that is attractive for capital markets, whether it’s debt or whether it’s equity, on our exits,” Gorzawski explained.
Westwind will primarily make direct equity investments working with operating partners and developers, but will invest across the capital stack, including in special situations such as providing liquidity to development partners. The firm also could potentially invest in hybrid convertible structures between debt and equity for acquisitions, developments and joint ventures.
As Harrison Street’s head of Europe from 2015-20, Gorzawski was the Chicago-based manager’s first employee in continental Europe and oversaw the growth of the European platform to €3 billion of assets, including more than 16,000 student beds, 2,600 residential units and over 2 million square feet of life sciences space across five countries.
He sees his experience in the alternative sectors as giving the firm an edge over other competitors seeking to ramp up in the space. “At the end of the day, those are shorter-term leases, those are specialized operations and specialized assets, and if you can get any of these wrong, you can end up in a very bad place,” Gorzawski said. “You need to have the experience and the knowledge or have a good partner that can help you with that if you are a larger capital investor that wants to get access to these sectors. For me, that has been the main focus of the strategy, finding sectors that are not yet institutional and making them institutional.”
He adds: “My investment in these sectors goes back more than just last year. While I was at Harrison Street, we were behind one of the first life science investments in the UK, in 2019, so that was well before covid. Many of the other entrants came into the market in the last 12 months.”
Additionally, Gorzawski sees his firm’s smaller size as an advantage over larger players in the niche real estate sectors. “The smaller sized, more entrepreneurial firms with shorter decision-making processes can react better to opportunities and changes in the markets,” he remarked.
“We can customize our investments much more to the single markets. One important thing to note is Europe is not one market but up to 20 markets. Each of these jurisdictions has their own tax regime, has their own planning regime. To be able to differentiate and customize a more tailored investment structures and joint ventures into those markets is a major advantage of our firm.”
A 15-year veteran in European real estate, Gorzawski was previously a managing director at AIG Real Estate, where he worked on pan-European opportunistic real estate deals, and prior to that, held positions at GE Capital. He expects to make a number of senior hires in the coming months and assemble a team of five to 10 professionals by the end of the year.