LaSalle Investment Management, having just closed its acquisition of the real estate multi-manager business at Aviva Investors this week, is now preparing for the roll-out of fund products under the firm’s newly launched indirect real estate platform, LaSalle Global Partner Solutions, PERE has learned.
“Our history has been mostly segregated mandates rather than funds or commingled product,” said Ed Casal, chief executive of LaSalle GPS and chief executive of real estate at Aviva. “In the long run, from a business standpoint, it’s advantageous to have a few large commingled products that can be your flagship and then you can build the segregated mandates around that, as opposed to the opposite, which is where we had a number of large segregated mandates, some small segregated mandates and then a few small fund of funds. But that really wasn’t an optimal product structure.”
LaSalle declined to comment on specific offerings, but PERE understands that the first product that the Chicago-based investment manager could evaluate include a global core open-ended commingled fund. Similar to comparable funds in the market, that vehicle could be income-oriented and focused on relative value globally. The firm also is considering a closed-end fund that would target both tactical opportunities such as tail-end fund investments as well as co-investments.
Speaking generally on products, Casal said LaSalle GPS’s offerings would be more diverse in terms of risk/return profile than those of Aviva’s multi-manager platform, which had historically been more core and risk averse. “Over time, I wouldn’t say we’re going to move too opportunistic, but we’ll be more across the risk spectrum, keeping the strength of our core capability, our income producing capability, but also taking advantage of the relationships we have to be a tactical investor in real estate,” he said.
LaSalle GPS will invest in the four real estate segments of public, private, equity and debt through third-party and in-house commingled funds, joint ventures and club deals, co-investments and secondaries. The majority of the platform’s investment activity is expected to be in private equity, although allocations to debt or listed securities could increase during certain points of the cycle that favor more income- and defense-oriented strategies.
“We are late in the cycle globally and we think we want to be very careful about how we build this,” said Casal. “The ability to do more of a four-quadrant strategy could be very advantageous.”
Jeff Jacobson, global chief executive at LaSalle, stressed LaSalle GPS’s offerings were still in the product development phase. “As we work through to launch the product, get the right structure and legal jurisdiction, tax, one of the considerations will be, is it creating something there is demand for?” he asked. “If it’s attractive to us and we think that it’s just too complicated, then we’ll simplify it and focus back towards primarily private equity.”
LaSalle GPS combines Aviva’s $7 billion real estate multimanager business; LaSalle’s existing Europe-based global indirect real estate group, with $1.5 billion in assets under management; and LaSalle’s $1.2 billion global co-investment program. The combined group has about 40 employees globally and manages more than 50 mandates and funds.