Kohlberg Kravis Roberts & Co has put another piece of the jigsaw in place as it builds out a real estate platform with the addition of a senior advisor on UK and European deals.
The New York-based private equity firm that is currently out raising its first ever dedicated property fund, has appointed Martin Moore, who retired at the end of June as chairman of Prudential Property Investment Managers, now renamed M&G Real Estate.
Moore enjoyed a long stint at Prudential having served as managing director of the real estate division since 1996. He said KKR had “huge ambition” in real estate investing.
The company made its first European investment in June having reportedly begun fundraising for a $500 million fund in March. The debut transaction saw KKR buy a portfolio of multi-let retail warehouses in Oxford, Glasgow and Sunderland from Resolution Property, a London-based firm.
Johannes Huth, head of KKR Europe, said in a statement issued today: “I am very pleased that Martin is joining KKR as a senior advisor. Martin’s experience and expertise in the real estate sector will be of great value to KKR and our investments.”
Ralph Rosenberg, global head of KKR Real Estate, added: “His wide and deep experience in the sector will be of great value as we seek to deploy more capital across Western Europe in partnership with real estate owners, lenders, operators and developers.”
Guillaume Cassou, the former Goldman Sachs real estate professional who is director of real estate at KKR Europe, said the firm was assessing a number of opportunities to expand its portfolio and that Moore would be working on transactions.
Cassou, who joined one year ago from Goldman Sachs’ real estate team, said in a recent interview with PERE that his firm had ambition to become a big player in real estate and currently was focussing on Western Europe. “We have been active in Ireland, the UK, France, Germany, Spain and Italy, looking at opportunities and working across the asset classes,” he said.
When it comes to the UK, KKR has been looking at deals in sought-after London and in regional cities where “attractive pricing” can be found, Cassou added. In London, it has been looking more at residential development in select areas, as well as office repositioning.
“Our business is focussed on straight asset deals such as this retail warehouse portfolio, but also more complicated corporate and structured transactions that obviously take longer and are harder to find.”
Examples of such transactions can be found in the US, where the firm led a buyout of the management company of Sunrise Senior Living from Health Care REIT for around $130 million in September.
KKR is seeing that many of the distressed opportunities in the US are over, so opportunities are more about growth markets and helping companies and platforms expand. Asia also is about growth, albeit with very different characteristics, while the opportunities in Europe are more about some form of stress, such as where borrowers might have to sell amid a constrained financing market, Cassou explained.
KKR has a team of around 10 people in the US and plans to boost its real estate group further in Europe. Ralph Rosenberg, who joined KKR in 2011 and is based in its New York headquarters, leads the overall effort. In May, the firm rounded out its key regional hires with the appointment of Bryan Southergill from JPMorgan, where he was a managing director and head of Asia real estate investing.
In its fundraising effort, KKR has secured a $300 million investment from the Teacher Retirement System of Texas for its debut fund, KKR Real Estate Partners Americas. The firm declined to comment on fundraising activity.