Many people were taken by surprise in late April when BlackRock, the New York-based investment manager with $3.65 trillion in assets on its books, announced it had appointed Jack Chandler as its global head of real estate.
One of LaSalle Investment Management’s long-serving elite, Chandler hardly was the person one would bet on leaving, particularly given that he had accepted a promotion to become global chief investment officer and chairman of LaSalle’s Asia business just months before. As one fellow GP said: “I was surprised given his recent promotion and the length of time he had spent at LaSalle. Perhaps he felt he had earned the opportunity to run something global.”
With LaSalle’s chief executive officer Jeff Jacobson seemingly going nowhere anytime soon, some peers believed Chandler, by default, could not rise to take the Chicago-based firm’s top job, something he was more than ready for. The GP added: “I would not bet against Jack [in his new role]. He is a smart, talented guy.”
In joining BlackRock, Chandler has brought the curtain down on a career with LaSalle that spanned the better part of 25 years. While he has held roles in the US, the crowning period of his career unquestionably came in Asia, where he and chief investment officer for Asia, Ian Mackie, built an empire from scratch. In a decade, LaSalle’s Asia business has completed more than $12 billion in transactions and currently has approximately $8 billion in assets under management across six funds, including three closed-ended, pan-Asia opportunity funds. The latest of these closed on $3 billion in September 2008, the second largest equity haul to date for an Asia real estate fund.
According to Chandler’s peers, BlackRock is not just bringing aboard a man able to build businesses, but a man with strong relationships in the limited partner world, particularly among US pension plans. Michael McCook, the former head of real estate at the California Public Employees’ Retirement System who recommended investments to LaSalle’s Asia funds before he retired, told PERE in 2009 that he found Chandler to be a “conscientious and very communicative” GP. Indeed, when PERE ran a profile of Chandler that year, the man himself underlined his central working attitude: “Everything waits for our investors, including internal calls and (chief executive of parent company Jones Lang LaSalle) Colin Dyer.”
The fallout
For LaSalle’s part, there will now be a senior hole to fill. Still, with the majority of Chandler’s responsibilities in Asia now in the custody of Philip Ling, who joined LaSalle in August 2008 from Sydney-based Lend Lease and was made chief executive for Asia when Chandler was made global chief investment officer, the firm’s regional leadership is essentially intact.
Potential creases to be ironed out for LaSalle, however, could include how to address Chandler’s key-man status with regards to its Asia funds. There also is the possibility he might seek to bring favoured staff with him to BlackRock. One source said: “It’s a reasonable speculation that there would be personnel he’d want to attract, but LaSalle is a big place so I don’t think a few people leaving would put them to rest.”
Jacobson said as much following Chandler’s departure. In a statement, he said: “We are fortunate to have made a number of positive additions to the [Asia] team over the last couple of years. While I will miss working with Jack, I look forward to a smooth transition that reflects our culture and puts clients’ interests first.”
Some believe, however, that Chandler immediately will seek to refresh BlackRock’s senior management, which predominantly was inherited via BlackRock’s January 2005 takeover of SSR Realty Advisors. Indeed, departures already have occurred since his appointment was announced.
Last month, PERE revealed that managing director Jay Alexander will depart this summer. Alexander was one of BlackRock’s most senior fund managers and the point man for its flagship fund, the open-ended, US-focused Granite Fund, a vehicle that held $4.6 billion as recently as last June. One former colleague of Alexander said he was once internally tipped as a future head of the firm’s entire real estate platform.
While Alexander’s claim for BlackRock’s real estate throne was never realised, others to have led the platform, which has a total of $13 billion in assets under management across both debt and equity investments, included Fred Lieblich and Paul Audet. Lieblich led when BlackRock, alongside Tishman Speyer, made its ill-fated $5.4 billion acquisition of New York’s Stuyvesant Town and Peter Cooper Village in 2006. He was replaced in 2008 by interim-head Audet, who relinquished the post to Chandler and will take up “other executive responsibilities within BlackRock,” the firm said.
At the start of the year, Chandler was getting ready to step into a newly-formed role at LaSalle aimed at enabling him to introduce new initiatives to his well-respected rolodex of investor contacts. By the end of the year, it will be BlackRock, not LaSalle, that expects to benefit from that.
Neither Chandler nor BlackRock would comment.
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