Lehman Brothers spin-out

Silverpeak Real Estate Partners has been launched as the new independent investment advisory business to the former Lehman Brothers Real Estate Private Equity funds. Brett Bossung and Mark Newman, former co-heads of the Lehman Brothers platform speak to PERE about the past, present and future.

Brett Bossung and Mark Newman have spoken out for the first time since forming Silverpeak Real Estate Partners, the successor to Lehman Brothers Private Equity business, five months ago.

In an interview with PERE magazine to be published in November, the former global co-heads of Lehman Brothers’ Real Estate Private Equity group discuss the spin out from Lehman, the formation of their new investment adviser, and the rocky road they have travelled since the bank’s collapse in September 2008.

Silverpeak Real Estate Partners and international sub-advisor, Broadcliff Capital Partners, is the new investment adviser to Lehman’s three multi-billion global funds, which will be rebranded under the Silverpeak name.

The company manages approximately $18 billion of assets and employs approximately 90 people in seven offices; Atlanta, New York, London, Mumbai, Singapore, Hong Kong, and Tokyo.

Since the transaction closed for Silverpeak to become a new independent investment adviser, it has been busy managing the existing global funds. But now, the senior team at Silverpeak, which consists of Bossung, Newman, chief financial officer Rodolpho Amboss, asset management head Kevin Dinnie, and Lehman’s former head of real estate Mark Walsh, are beginning to look forward.

Says Bossung in the interview: “Over the last 21 months, we consistently told our investors: ‘We are not going anywhere. We are focussed on managing the assets.’ Ultimately, as we told them, we are going to grow the business again, but we still have $18 billion of real estate to manage.”

Adds Newman: “Were there moments in time when we all felt very challenged? Of course. But it was either ‘shoulder to the wheel’ or go off and do something else. We made an active decision, days after Lehman filed, to see this thing through. That was the message we delivered to our team around the world and to our investors, and that is what we did.”

They say Silverpeak is unlikely to raise a global diversified fund given the sentiment that appears to prevail among many LPs at the moment against such offerings.

Instead, Bossung and Newman say the environment is becoming much more “focussed.” We are more inclined to adopt a regional fund format, with a US-based fund operating under the Silverpeak name and an international Europe-based fund under Broadcliff. We think this format fits well with investor sentiment and allows for more control by and interaction with the limited partners,” they say.