Bifurcation is one word commonly used to sum up the global real estate market today. Whether it’s related to assets, markets or investors, the industry has bifurcated between the haves (those with cash flow, buyer interest or capital) and the have-nots. The fundraising market is certainly no different. There has been a flight to safety across the board for investors and the market will be more focused on the established names that have performed in the downturn and those emerging out of the established platforms. William Thompson Greenhill & Co Real Estate Capital Advisory
As GPs, LPs and placement agents deal with the fallout of the credit crisis, efforts to raise capital for commingled real estate funds has bifurcated between established platforms with established (successful) track records and newer, emerging managers trying to set up on their own or break into the asset class.
In leaving Credit Suisse Real Estate Private Fund Group (REPFG) to launch Greenhill & Co’s new real estate capital advisory business this summer, William Thompson said it was on the former front that he and his 11-strong team would concentrate their efforts.
Instead, the Greenhill & Co crew – lead by Thompson and former REPFG co-heads Walter Stackler, Pamela Wright and Fredrik Elwing – expect to concentrate much of their efforts on “emerging real estate brands” who have the potential to be “future leaders in the market”; GPs with a sound track record coupled with adequate personnel and financial resources to manage one or several funds through various phases of the business cycle and are in need of a more diversified investor base.
“There has been a flight to safety across the board for investors and the market will be more focused on the established names that have performed in the downturn and those emerging out of the established platforms,” Thompson added.
Thompson, Stackler, Wright and Elwing officially launched Greenhill Real Estate Capital Advisory group in late June after giving notice of their departure from Credit Suisse in March. As previously reported, the four managing directors were joined shortly afterwards by seven other former REPFG executives including Douglas Kinney, Manjul Ramchandani, Alok Gaur, Lee Purcell, Daniel Taylor, Yan Ling and Ben Linder.
The Greenhill group has also now been joined by another new addition, Annemarie Manning from APG Investments. As of 1 September, Manning will help build Greenhill’s capital raising and advisory business in London alongside Elwing. Manning was previously a senior portfolio manager in APG’s real estate group in Amsterdam since 2002.
Although Thompson, Stackler, Wright and Elwing declined to elaborate on the reasons behind their departure from REPFG, a decade after founding the business, the quartet said Greenhill offered them a global platform where their business is a “strategic priority” and a “conflict-free” operation that was not part of a larger financial institution also offering principal real estate investment programmes, lending, underwriting or trading services.
Actively pursuing several new real estate fundraising mandates, the Greenhill team is also set to focus on wider capital raising activities, such as recapitalisations, co-investments, separate accounts and joint ventures as well as secondary sales and GP and LP advisory work. “A lot of investors are still focused on their existing portfolio issues,” said Wright, “but they are starting to look ahead at the buying opportunities for the next two to three years and there is an excitement starting to grow again.”
There has been a flight to safety across the board for investors and the market will be more focused on the established names that have performed in the downturn and those emerging out of the established platforms.
William Thompson Greenhill & Co Real Estate Capital Advisory