Ivanhoé Cambridge’s Palladitcheff: ‘Head-hunters think I’m a transformational CEO’

Anyone working at Ivanhoé Cambridge, the real estate subsidiary of CDPQ – Caisse de dépôt et placement du Québec – in the last five years will be familiar with Nathalie en direct, a series of internal, informal market presentations and conversations led by Nathalie Palladitcheff, the subsidiary’s outgoing chief executive officer.

The series is among the softer legacies she leaves behind when the job concludes at the end of the month. The bigger legacy, she believes, will be a tenure characterized as a period of transition and herself as an agent of change. Certainly, that is an impression recruiters are giving her. “The calls I’m getting are all relating to real estate and always about fixing or turning something around. Head-hunters think I’m a transformational CEO,” she tells PERE in an exclusive interview marking her departure.

It is an understandable perspective. Since being appointed CEO in 2019, she radically improved the firm’s performance by executing a strategy involving: reversing an overweighting to offices and retail in favor of logistics and residential; outsourcing the entire asset management of its sizable Canadian retail holdings; and, critically, eradicating perceptions of the investor as a passive ‘LP’ preferring to write big checks over rolling up its own sleeves to manage its deployments.

These days, you are more likely to read about the direct investing of Ivanhoé Cambridge than any indirect fund commitment. Indeed, in the last year she has been particularly vocal about issues of misalignment between LPs and GPs in the context of a private real estate market losing value. “Some GPs have lost their promote now, so where’s the motivation to make money?” she asks.

The final change involving Palladitcheff’s participation is Ivanhoé Cambridge’s biggest. In January, CDPQ announced the integration of the firm, alongside Otéra Capital, its real estate credit business, in a move designed to drive efficiencies and bring significant annual cost savings. The integration is expected to take between 18 months and two years, by which point her successor Rana Ghorayeb, formerly Otéra’s CEO, should be in full swing as head of what essentially will be CDPQ’s real estate portfolio.

Unsurprisingly, Palladitcheff played a significant role in choosing Ghorayeb as her successor, alongside CDPQ’s CEO Charles Emond, one her biggest proponents who previously extolled her virtues to PERE for a feature dedicated to her winning the PERE Lifetime Achievement Award in 2023.

She describes this transition as an “incredible opportunity to close things my way.” And in Ghorayeb, Palladitcheff believes CDPQ has elevated an ideal leader for this moment – a time when real estate credit markets are front and center for most people in private real estate’s capital markets, given the surge in base rates in western markets at the end of 2022.

“The fact she can look at this [debt] opportunity in the asset class – and that side of the coin in terms of how we manage our portfolio – will be key.” Palladitcheff points to CDPQ’s low portfolio-wide leverage to demonstrate there is little to worry about regarding the investor’s current borrowing. “We have a reasonable LTV, debt which is very well priced, not so much exposure to CMBS or other mortgages that could hurt us. But, nevertheless, we can always improve the situation and she can help to achieve that.”

Palladitcheff says Ghorayeb was selected from an internal process but was the leading candidate to replace her from the start of the succession planning. “She would have been selected even if we opened the process externally because she’s the ideal candidate for the job.” By Palladitcheff’s reckoning, Ghorayeb’s previous 12 years at CDPQ, coupled with her experience in real estate credit markets, provides the investor with a “natural line between the past and future.”

But what of the future for Palladitcheff? “I really don’t know what I am going to do in the next months,” she admits. She does know she will retain roots in Quebec and her connections with CDPQ. “I’ll be an ambassador of CDPQ wherever my next chapter is.” Indeed, since arriving she has grown an affinity for the region, becoming a dual citizen, and her family have local commitments that outdate her tenure at Ivanhoé Cambridge.

What role Palladitcheff accepts next remains to be seen but she is open-minded about where it is. “I’m lucky enough to have wonderful grown-up children who don’t need me day to day and a husband who can work from anywhere, is mobile and open-minded so can potentially move.” She admits to having just written her first CV, which would also include spells at the listed French real estate company ICADE and the bank Société Foncière Lyonnaise. Of its next entry: “I want to do something useful and that makes sense,” she says. “I’m not looking for prestige or power, just a place where I can have an impact.”

The final Nathalie en direct will, fittingly, be an interview with Ghorayeb. After that, the transition to her successor will soon complete and Palladitcheff, Ivanhoé Cambridge’s so-called ‘transformational CEO,’ will leave. CDPQ will start its next chapter while she finds hers. In an agreement around her resignation, she has no gardening leave so that could start sooner rather than later. “I don’t think I can pause for such a long time,” she says. “I’m going to pick something at some point.”