ASIA NEWS: Chandler’s new mission

Jack Chandler

Judging from how LaSalle Investment Management’s Jack Chandler is talking these days, it is hard not to predict that the Chicago-based investment management firm will make some big plays starting this year.

That Chandler was elevated last month from chief executive officer of its Asia business to the newly created position of global chief investment officer reflects more than mere hierarchical ascent. With the daily management of LaSalle’s $8.7 billion (as of the third quarter, 2010) Asia portfolio effectively handed to Phillip Ling, who was promoted from managing director to chief executive officer at the same time, Chandler is now free to expand his focus to include new initiatives.

When PERE caught up with him post-promotion, the vernacular Chandler used to describe his new role was laced with hints of new investment products for LaSalle’s largest LPs. “We have an existing product line that includes open- and closed-ended funds as well as securities programmes,” he said. “The global chief investment officer role revolves around working with our regional teams on their investment activities but also assessing emerging investment opportunities outside of their mandates. I’m going to be working out how to augment those and bring them to our partners in ways that are different to our existing vehicles.”

It’s when asked about what he plans to do first in his new capacity that Chandler pointed towards size. “We’re just getting started, but it’ll be more about ideas of scale outside our existing product line,” he said.

LaSalle currently is exploring investments in large privatisations and opportunities associated with deleveraging, including portfolio and asset recapitalisations where the company can provide mezzanine financing, preferred equity or other structured investments. Chandler described such examples as situations where, “because of scale, we want to get other partners involved”.

When asked if LaSalle was looking to replicate club ventures like Toronto-based Brookfield Asset Management’s $5.5 billion Real Estate Turnaround Consortium, which closed in 2009 after garnering large commitments by global investors including the Canada Pension Plan Investment Board, China Investment Corporation and Future Fund, Chandler stopped short. However, he said: “What Brookfield did was a pretty interesting approach. Their timing was great, and they had a balance sheet to write big cheques.”

Brookfield’s consortium was lead investor in the restructuring of US shopping mall REIT General Growth Properties, which it took from Chapter 11 bankruptcy protection via a $6.8 billion recapitalisation. Chandler added: “If we had a great idea where we were writing a big cheque ourselves while bringing in some partners, I wouldn’t be astonished.”

If we had a great idea where we were writing a big cheque ourselves while bringing in some partners, I wouldn’t be astonished Jack Chandler

Speaking more generally, Chandler said: “Investors are looking for strategic and tactical deployment in high-quality assets with good income in structures they feel comfortable with. They want their partners to bring them interesting ideas.”

Chandler’s Asia endeavours will continue concurrently with his new role, and this was reflected in his dual promotion to executive chairman for the region, alongside global CIO. He will remain on LaSalle’s Asia investment committee, but he said: “I’m not the guy doing the acquisitions now.” That remit falls to Ling and LaSalle’s other Asia leaders.

Still, Chandler was instrumental in raising $3 billion in 2007 for the LaSalle Asia Opportunity Fund III from a pool of investors that, according to PERE Connect, included the California Public Employees’ Retirement System and the Hong Kong Jockey Club. For them, he still will serve as point man.

Chandler wouldn’t confirm whether he was the ‘key-man’ for the fund, but he said: “What is important is that I was the guy who committed our firm to doing the right thing for our investors. Am I directly responsible? Yes, absolutely. But whatever documents say or don’t say, we need to be doing the right thing.”

The fund is now almost two-thirds invested, and Chandler said he moves on to his new role with the belief it is “well in hand. I’m now comfortable looking at things beyond Asia,” he added.