G2 Investment Partners, a spin-out from global financial services firm Guggenheim Partners, has created a real estate merchant banking platform targeting direct lending, CMBS, hospitality debt and equity investments, and commercial real estate advisory work led by a raft of former Lehman Brothers’ senior executives.
The New York-based firm has hired Kenneth Cohen, Larry Kravetz and Charles Manna, previously with Lehman Brothers’ conduit large loan and CMBS trading businesses; Alan Kanders, formerly managing director of the bank’s global commercial real estate group targeting hospitality; and Spencer Kagan, former head of credit and underwriting for Lehman’s large loan group, together with a team of underwriters and credit analysts.
G2 has also hired former Fortress real estate executive Joseph Fong and Jeffrey Mudrick, previously head of commercial real estate credit distribution at Citi Markets & Banking. Both previously worked at Lehman Brothers until 2007 and 2008, respectively.
The platform, which officially launched in January, is named G2 Real Estate Partners.
G2 Investment Partners was formed by two former Guggenheim Partners executives and a prominent Latin American financier and social activist.
J. Todd Morley was a co-founder of New York- and Chicago-based Guggenheim, and continues to serve on the firm’s executive committee. David Conrod was a Guggenheim senior managing director leading its private fund placement group. The third G2 co-founder, Antonio de la Rua, is the son of Fernando de la Rua, Argentina’s president from 1999 to 2001. The younger de la Rua, a lawyer by training, has been involved in land development and charitable work since his father left office.
G2 Real Estate is focused on a wide set of equity and debt opportunities around the world. In an interview with PERE, Morley said of the real estate platform: “We saw a great opportunity with corporate debt last year and the great deleveraging that occurred after the crisis of 2008. A similar backdrop now exists for commercial real estate globally. The amount of debt that needs to be refinanced is staggering.”
The real estate group has formed various businesses, including advisory a direct lending arm and an open-ended $500 million credit opportunities fund targeting AAA and senior non-AAA rated CMBS bonds.
G2 Real Estate will also target distressed debt and equity hospitality investments focused on key US gateway cities, such as New York, Los Angeles and San Francisco, with some limited ability to source deals outside the US.
The firm, which is believed to be raising a $300 million closed-ended hospitality fund, is expected to employ a mix of loan-to-own strategies as well as more direct investments and recapitalisations in the upper and upper-scale hotel segment.
Cohen and Kravetz founded the real estate advisory firm Vesey Street Partners in the wake of Lehman Brothers’ bankruptcy filing in September 2008 advising primarily CMBS borrowers on transactions and workout situations. G2 Real Estate Partners will continue that advisory business.
Morley declined to talk about fundraising but said G2 had been in talks with Cohen, Kravetz and Manna for more than a year.
Last week it was revealed G2 Investment Partners had also teamed up with the family office of magazine family Forbes, to create placement group Forbes Private Capital Group.
G2 Investment Group’s chief investment officer is a person well known to the private equity community – Alan Menkes, formerly of investment bank Thomas Weisel’s merchant banking arm. Menkes also is a former partner with buyout firm Hicks Muse Tate & Furst (now called HM Capital), and before that was an early employee of The Carlyle Group.
The firm has also launched a credit sales and trading division with the hire of Scott Best and James Gregorek, two former Lehman Brothers executives.