AMERICAS NEWS: Business as usual

ING Clarion Partners could be forgiven for being somewhat distracted by the uncertainty surrounding its pending sale as part of ING Group’s exit from the real estate investment management business. Yet, while all eyes may be on the outcome of the sale of the €65 billion ING REIM, Clarion’s new chief investment officer David Gilbert said his are firmly on the road ahead, insisting that it is “business as usual”.

“The sale – who owns us or what form of ownership we have – has no bearing at all on our investment strategy,” said Gilbert in his first PERE interview since being promoted to CIO in charge of the firm’s acquisition and investment research operations. That promotion came in October following the departure of Jeffrey Barclay, who left to lead Goldman Sachs’ expansion into core real estate.

Indeed, over the past year, ING Clarion has been steadily getting on with the job at hand: investing roughly $500 million of equity to acquire about $800 million in assets in 2010. Now, as Gilbert eyes 2011, the former managing partner at JP Morgan Partners said ING Clarion expected to invest more than $1 billion on behalf of its active portfolios – three open-ended funds, three closed-ended funds and seven separate accounts.

Gilbert said that, even given the lack of distressed opportunities to have emerged out of the crisis, there were still some “great buying opportunities” available today for those GPs willing to be selective. “We are seeing potential acquisitions priced below current replacement cost in most sectors,” he added.

For ING Clarion, US multifamily is one sector that holds the biggest appeal. “We are bullish on returns in the sector, especially in supply constrained markets,” Gilbert said. In addition, he noted that the firm is highly focused on opportunities to recapitalise over-leveraged borrowers. “From an industry perspective, this is a process which will require significant equity over time.” 

However, Gilbert said a medium-term view should be taken when it comes to development, particularly in the multifamily sector, adding that there was “opportunity to build selectively in a lot of great locations”. By getting ahead of the market and trying to deliver product as employment picks up, GPs could make “outstanding investments,” provided they picked their locations “very, very selectively”, he explained.