Forum Partners Investment Management has recently taken on a heavy-hitting investment banker from JPMorgan Cazenove.
Richard Cotton, who has spent 23 years at Cazenove, is joining Forum in its London office from June.
The appointment comes shortly after the close of the firm's third European vehicle, Forum European Realty Income III, which garnered €443 million in commitments from investors. The Greenwich, Connecticut-based firm's last European fund attracted €250 million.
Forum specialises in providing growth or restructuring capital by taking a significant minority stake in a business, typically by investing in a debt instrument granting the firm some senior claim on the cash flow. Previous investments have included taking a stake in DIC, the German property company in which Morgan Stanley also has an interest.
With the downturn in values, the market has the capacity to put into jeopardy debt refinancing for the commercial market sector easily for the next three years. It is going to call upon debt providers, equity players and management teams to work together in a very collaborative fashion.
Forum chief executive Russell Platt told PERE that the firm had analysed most of the large and mid-cap property companies in the UK, with expectations the firm would be making investments this year.
“We expect Richard to be quite influential. In our discussions with property companies in the UK we know he has a strong reputation,” Platt added.
Platt believed valuations would fall far enough to allow some take-privates, and a greater consolidation of the industry as lower-tier companies struggle to access capital.
He argued that unless the economy begins to turn around in the next 12 months, companies facing debt maturities will face some difficult issues. “It was not uncommon to hear a team say six months ago ‘We will just extend our loan another year’, but I don't think that is good enough.
“With the downturn in values, the market has the capacity to put into jeopardy debt refinancing for the commercial market sector easily for the next three years. It is going to call upon debt providers, equity players and management teams to work together in a very collaborative fashion.”
Platt added: “These can be very complicated deals and for the companies involved they have to get it right. To have someone of Richard's expertise is really great for us.”
Forum's European arm is placing much of its focus on the UK for the foreseeable future. “We are putting our money where our mouth is by investing in the talent necessary to execute on some of these investments.”
Forum's most recent investment came last year when it provided co-investment capital to commercial and residential special servicer Crown Mortgage Management, based in Ipswich, England.