EUROPE NEWS: The English patient

On August 22, Jeffrey Dishner began his first day at Starwood Capital Group’s London office, from where he is expected to grow the firm’s European and Asian business via significant deals and hires. However, instead of welcome notes, Starwood’s head of real estate acquisitions was met with a barrage of email abuse from colleagues and associates.

Indeed, most contact with Starwood personnel that day centered on the fortuitous timing of Dishner’s relocation from Starwood’s global headquarters in Greenwich, Connecticut to its European headquarters in London. It seems he had ‘escaped’ from the US with his wife and two daughters just in time to miss the earthquake on the US East Coast and before Hurricane Irene was set to strike the same area.

Still, brushing aside his uncanny sense of timing, Dishner has a serious role to perform for Starwood.  He has worked with Starwood chairman Barry Sternlicht for a total of 23 years, beginning with their stint together at JMB Realty. He joined Starwood in 1994 and more recently has been running the firm’s global acquisitions group, with the European business reporting into him for the past 12 years.

About 75 to 85 percent of Starwood’s investment business is carried out in the US, Dishner noted. One reason for that is the firm never put many resources into Europe, but that is about to change.

“Moving from Greenwich to London will precipitate international expansion for Starwood, with my mandate being to get a bigger footprint in Europe first,” Dishner said. “Given the turmoil in the banking sector, there will be divestitures of assets at some point in time, and that is what the firm has been focused on for the past two years. It was decided that I would come over here and initially focus on building the platform in Europe to take advantage of the distressed debt situation, as well as use our London base to expand our international businesses in India and the rest of Asia.”

In Europe, Starwood has offices in both London and Paris. This month, the firm is due to announce at least one addition to the London base from the US, and it has hired a second dealmaker in London. “I continue to oversee global acquisitions, so I will be travelling back to the US regularly,” Dishner said. “I will be spending one week in the US, one week in Asia and two weeks in Europe each month.”

Dishner’s relocation coincides with the departure of Sean Arnold, head of European acquisitions, who recently left Starwood to set up his own venture with Nick Lyons of The Blackstone Group. “Sean was a very important piece in how we were going to grow Europe, so I am disappointed,” Dishner said. “It is an entrepreneurial business, so I respect the fact that Sean is pursuing his own venture and wish him the best.”

With regards to strategy, Dishner added: “The firm is really focused on performing and nonperforming debt, and we will buy individual loans, pools of loans, originate performing loans and participate in mezzanine debt. The only issue is that there is not a lot of deal flow, and the big reason for that is that not one of these institutions can afford to take a really big loss. Until the FDIC got involved in the US, there wasn’t much activity there either, so I think the governments in Europe are going to need to get more involved. Still, it is a good time to be in this theatre and be a part of what is going to unfold. I just think you need to be patient.”