Paris to the world

For the past 15 years, Pierre Vaquier has toiled for the property arm of French insurer and asset manager AXA. But it is only since 2007 that he has been in charge. PERE recently caught up with the chief executive of AXA Real Estate Investment Managers, with its €43 billion of assets, staff of 500 and dizzying array of property funds, to hear about how Vaquier plans to further grow an already sizeable organisation. By Robin Marriott

Pierre Vaquier, a tall lean Frenchman and the son of a surgeon, has the air of authority suitable for a doctor, but he did not follow his father into medicine. Instead, he chose an infinitely more precarious profession: that of investment banking. He began his career in 1981 in the US working for French bank Paribas buying distressed property.

Scroll forward 27 years and it is clear that what could have been a short-lived gamble has turned out to be a lifelong dedication to real estate. Vaquier joined AXA, a larger French insurer and asset manager in 1993. He worked his way up to become head of the French real estate business in 1999 when AXA Real Estate Investment Managers (AXA REIM) was established to finally become chief executive last year when Paul Marcuse left for Swiss bank, UBS. You might say that Vaquier is now Mr. AXA REIM.

On first impressions, the chief executive of AXA REIM exudes the calming influence of someone used to dealing with life and death matters. He is reassuring, softly spoken and measured. This might be just one side to him. After all, he used to be a rugby player and loves the game. “I like the spirit of rugby,” he says. “It is very smart and aggressive.”

Those that know him do not describe Vaquier as being particularly aggressive, but they certainly describe him as smart. He had better be, too. Real estate, like rugby, is filled with aggressive players, but the smart ones win.

Vaquier meets with PERE high up in the headquarters of AXA REIM in Coeur Dé fense skyscraper of Paris. The decor of the long corridor outside our meeting seems to have been inspired by Andy Warhol, with yellow, red and pink-tinted portraits of AXA REIM's employees staring out. There is a mixture of senior and junior individuals. All look happy. It serves as a reminder that property is a people business.

Over the next hour, “people” issues arise fairly regularly in conversation as Vaquier explains AXA's plan to grow. An immediate challenge is the financial turmoil, of course. “I have never seen a crisis like this in my life to be honest,” he says. “It requires people here to be very involved in anticipating issues.” Since the summer, Vaquier has been spending considerably more time comparing notes with the heads of AXA's other investment management divisions, which include AXA Private Equity. “We spend a lot of time trying to anticipate what might happen, but at the same time trying to seize the opportunities,” he says.

Pierre Vaquier fact file
Vaquier joined the AXA Group in 1993 as a director of business development for AXA Immobilier in Paris. In 1995 he became chairman and CEO at Colisé es Services, an AXA Group asset management business. In 1999 he became chairman and CEO of AXA REIM France and deputy managing director at AXA REIM. He was promoted from head of the French business to deputy then chief executive of the global operation in 2007. Before joining the AXA Group, he was at French investment bank Paribas, where he helped found and then manage Paribas Properties Inc., the real estate management subsidiary of Paribas in North America. Interests: rugby, shooting.

Back to the USA
Though Asia is a priority, Vaquier wants to expand into a well emerged market: America. The US represents a gaping hole for AXA REIM despite the fact that AXA has had a large presence in North America for years. The surprising fact is that AXA REIM doesn't have an office in the US or any real estate investments. This wasn't always the case. Almost two decades ago, AXA REIM's parent company took over US interests of the troubled Equitable Life pension fund to form AXA Equitable. As part of that deal, it acquired Equitable Real Estate Management. In this way, AXA came to know the US real estate market well, but it sold the business around six years later to Australian firm Lend Lease. It hasn't returned to the market since.

The subject of AXA REIM and the US real estate is a subject close to the heart of Vaquier. He was already working for AXA in the 1990s when Equitable was sold to Lend Lease and he says the decision was taken because the business was mature and without much upside. Following the sale, AXA concentrated on growth in Europe. But for Vaquier, US and AXA are even more closely connected: he helped AXA buy the real estate part of Equitable in the first place.

Having graduated in 1980 from the prestigious HEC (É cole des Hautes Études Commerciales de Paris) in Paris, Vaquier took a job at French bank Paribas in the US buying distressed real estate. Having gained experience working in the distress markets of 1981 and the savings and loan crisis later in the same decade, he eventually arrived at a deal he describes as a highlight of his time in the US. AXA was looking for a quick investment in North America and Vaquier, at Paribas, began working on the valuation of Equitable Life's real estate portfolio and its asset management subsidiaries. It was a very interesting job, he recalls, because Equitable had a huge exposure to commercial mortgages and direct real estate. “It was like a snapshot of the time in the US,” he says. He must have impressed AXA, because in 1993 AXA offered Vaquier a job and for the next four years part of his remit was to assess European opportunities.

Now, some 15 years after joining AXA and having played a part in helping the firm enter the US real estate market, he finds himself contemplating taking AXA back in.

Vaquier does have some reservations about the US market. He believes it is still expensive. “This doesn't mean we are not looking, but it is not something we will push aggressively,” he says. That might be so, but he is adamant that AXA REIM will open a US office. The main advantage to being there, of course, is to tap the US pension funds.

As for building an investment platform in the US, “It is still a question mark,” he says. “In a world where we are going to have massive consolidation of players, opportunities might occur. We must ask ourselves what might be the impact if AXA does an acquisition. It might be a pragmatic situation.”

Opportunity funds• Enterprise Fund €600m• REOF 1 – European Real Estate Opportunity Fund 1, launched• EOIV – European Offce Income Venture €500mJan 2002. Equity raised: €100m. Gross size: €400m• ERIV 1 – European Retail Income Venture €700m• REOF 2 – European Real Estate Opportunity Fund 2,• ERIV 2 – European Retail Income Venture 2 €l,300mlaunched Dec 2006. Equity raised: €130m. Gross size:• FDV 1 – French Development Venture 1 €l,000m€500m• FDV 2 – French Development Venture 2 €2,000m• FIF – French Institutional Fund €250mOther funds: name and gross size• GLF – Greater London Fund €580m• APIV – Alternative Property Income Venture €l,500m• APT – AXA Property Trust €220mSeparate Accounts• Asian Fund of Funds $500m• Debt Product Separate Account €l,000m• *AXA Immoselect €3,400m• Japan Separate Account. Institution investing in• *AXA Immosolutions €2,000mJapanese funds ¥70,000m• *AXA Real Invest Europa €l,600m• Japan Separate Account. Institution investing in• CIPF – Core Italian Properties Fund €200mJapanese assets ¥30,000m• Debt Portfolio €l,000m• Japan Separate Account. Global institution investing in• EAVF – European Added Value Fund €l,000mJapanese assets ¥120,000m• EHV – European Hotel Venture €l,500m• Pan European Separate Account €1,830m• EIP – European Industrial Partnership €530m• UK Separate Account €3,200m• ELIV – European Logistics Income Venture €l,000m