EDITOR'S LETTER: Anticipating the market

Politicians can be friends or foes to the private equity real estate industry. They can back a development project or ruin one. They also can pass legislation favourable to a general partner’s tax status or wipe out a whole swathe of the industry with deathly regulation.

Someone who knows both sides well is Henry Cisneros, whom Evelyn Lee profiles in this issue, starting on page 34. Cisneros, for those of you without total recall of US politics during President Clinton’s era, used to be US housing secretary. Nowadays, however, he runs CityView, the US urban housing specialist that last month won a $100 million commitment from the Los Angeles County Employees’ Retirement Association. 

As Cisneros makes plain in this month’s Blueprint interview, “anticipating the marketplace can be a very profitable proposition” for private equity folk. Of course, CityView is not the only firm trying to do that; it is a notion mirrored across the world. 

We would like to draw your attention to two markets in particular. On page 42, five professionals explain how they are getting ahead of the curve in Continental Europe’s largest real estate market, Germany. Meanwhile, with many readers turning their gaze upon Australia in recent months, PERE made the trip Down Under as part of our special supplement on the market, which is published alongside this issue. 

Besides that, there are plenty of other examples of firms trying to get ahead of the curve in this issue. In Europe, we note how PIMCO, which manages the world’s largest bond fund, wants to staff up in London to take advantage of distress and real estate loan sales. Meanwhile, in the Americas, we have tales of a new focus on Brazil by a European manager and what’s next for Gary Garrabrant, who leaves emerging markets specialist Equity International under mysterious circumstances. Garrabrant likely will emerge with his own firm as he anticipates the next new market for investors. 

Not to be outdone, our Asia section offers news of a major new platform in China, where Harvest Fund Management, China’s second largest asset manager, has struck up a joint venture with Britain’s Grosvenor.

Finally, we shouldn’t let this month pass without a nod to a new record. At press time, The Blackstone Group was due to announce the close of its latest global opportunity fund, which some say is like ‘buying’ the real estate market. At $13.3 billion, they are not far off.

Enjoy the issue,
Robin Marriott