King Street hires former Blackstone exec in aggregation push

The new hire, who previously focused on assembling portfolios at the New York-based mega-manager, will perform a similar role at his new firm.

King Street Capital Management is continuing its recent spate of hiring, adding Matt Rafferty as head of European real estate asset management. Rafferty will be based in London.

Rafferty joins after a nine-year tenure at Blackstone, where he started as a real estate analyst and left as a principal. His most recent focus has been on portfolio aggregation in Blackstone’s European logistics businesses, Logicor, which was sold to China Investment Corporation in 2017, and Mileway, which the firm recapitalized in April. King Street’s plan is to utilize Rafferty’s expertise in portfolio aggregation as it continues to grow its business.

“We have certain strategies we are currently investing in that involve portfolio aggregation of smaller investments being put together to create larger platforms,” David Walch, partner and co-portfolio manager, exclusively told PERE.

Portfolio aggregation also involves implementing a strategy that impacts a large amount of assets, Rafferty said. That can take the form of a capital expenditure plan or a software implementation. The two Blackstone portfolios Rafferty worked on encompassed a total of more than 2,300 assets. King Street’s current European portfolio totals 30 assets, but the firm plans to raise capital in dedicated vehicles and consequently is expecting to grow quickly in the region, PERE understands.

The firm’s real estate growth in Europe will not come from just logistics, however. King Street’s European portfolio also contains what Walch described as alternative residential – student and senior housing – as well as hotels, movie studios and high-yield credit. Rafferty highlighted student housing in Southern Europe as a particularly interesting strategy for future expansion.

In terms of geography, King Street’s European real estate strategy has focused mostly on Western Europe – UK, France, Germany, Spain, Italy, the Netherlands and Ireland – and plans to continue to invest in the markets it knows best as it continues its growth.

Institutional pedigree

Rafferty follows King Street’s other recent hires from some of the top firms in the industry. In March, PERE reported the firm had poached Mark Van Zandt, managing partner at BentallGreenOak. Van Zandt officially starts in August as a managing director in King Street’s real estate team, bringing expertise in single-asset and portfolio transactions. King Street also brought over Natasha Socolof a month ago from KKR to be a director of marketing and investor relations.

The firm’s increasingly institutional team was part of the equation for Rafferty opting to join the growing firm. “Knowing that there was a real professional pedigree does help to convince yourself that you’re going to a winning team,” Rafferty said.

King Street is currently raising its third institutional fund, King Street Real Estate Fund III, which has raised $100 million since launching in October last year, according to PERE data. The firm is targeting $500 million for the opportunistic vehicle.