Interview: LaSalle sees growth in Europe from separate accounts

The European business led by Simon Marrison and Susan Lloyd-Hurwitz also has a new value added strategy to create core assets.

Chicago-based LaSalle Investment Management sees separate accounts as a strong area of growth for the business in Europe. At the same time, it wants to pursue a pan Europe value added strategy to create core assets, the firm has said.
In an interview with PERE on Wednesday, Simon Marrison, head of Europe, and Susan Lloyd-Hurwitz, managing director in Europe, outlined their plans for the business, which has been refocussed on the back of new hires and promotions over the last two years.
The firm, which employs 240 people in the region and manages €10 billion ($14 billion) of assets, is now organised into three separate business lines; UK core/core plus investing; Continental Europe core/core-plus investing, and; value add/opportunistic investing.
Marrison said one of the growth areas for the firm’s European business was managing separate accounts in the UK and Continental Europe in an environment where “big ticket” investors say they want more control to chose asset allocation. 
Lloyd-Hurwitz added the firm was working on three or four initiatives that represented “major moves” in the separate accounts business. 
To date, she said, the separate accounts business had been predominately about international investors looking for European exposure. “Now we are seeing and have made progress with a number of domestic investors looking to execute a European separate account strategy.”

However, separate accounts is not the only area LaSalle sees growth coming from in Europe.

It is also seeing scope to expand via existing clients, some of whom want to increase their commitments to an existing separate account. In addition, it sees possibilities to expand with co-mingled funds, despite some investors shying away from large co-mingled structures. 

The company is currently in the market with LaSalle UK Special Situations Real Estate Fund, which has held a first close on £51 million (€58 million; $77 million). It is also raising a UK open ended core fund, the LaSalle UK Balanced Fund, aimed at raising core capital to invest in UK specific assets.

But the other major initiative is a pan European strategy that incorporates fully renovating assets that can be sold to investors looking for core and core plus properties from 2012.

Marrison said the firm was “driving into the creation” of assets concentrating on core markets of the UK, Germany and France.
“Yes there is a lot of core, core-plus money coming into the market, but at the same time there is an opportunity to create assets to sell to that,” he said.

In 2008, the firm did have a plan to raise LaSalle UK Ventures II and also LaSalle European Ventures Fund III but these funds have been merged into newer vehicles to take better advantage of the wider European recovery in real estate, LaSalle said.