Who are the Apples, Googles and Amazons of private equity real estate? In this issue of PERE, which is accompanied by our 2012 Awards & Annual Review supplement, we attempt to shed some light on that question.
As Erik Kolb, our senior editor, writes in his introduction to the supplement, we certainly have witnessed the emergence of the large steady firms that win prizes for doing a good job. However, there also are the equivalents of lesser known NASDAQ stocks from around the world that are coming to the fore.
To a significant degree, much of the explanation for how these successful firms arrived in a good place has to do with proper corporate governance, discipline, skill and knowledge – as well as, perhaps, a little bit of luck. To be clearer about that, many of the winners in our 2012 Global PERE Awards are the ones that didn’t abandon those qualities prior to the global financial crisis, which is why they are in a strong position today.
Indeed, the global financial crisis has been the biggest story to affect the real estate industry since the days of the Resolution Trust Corporation in the US. I don’t think it needs to be spelled out that what led to the crisis had to do with finance – the lack of discipline by banks, borrowers and go-betweens for several years prior to 2008. Therefore, it is always telling to examine what is happening in the world of real estate finance, which we focus on in this issue.
Beginning on page 36, Evelyn Lee takes a look at the US real estate finance landscape and reports how, for some firms, it makes sense to ‘buy the bank’, as it were. Then, on page 40, James Comtois interviews Michael Nierenberg of Bank of America Merrill Lynch, who explains how and why the commercial mortgage-backed securities market is steadily recovering. Plus we have a report on how some US banks – including Bank of America – are making a return to UK and European commercial real estate lending, which surely is a good thing for Europe’s playground of higher-yield investors.
Still, it is not all about real estate finance. As usual, we bring you news from around the world, including the first interview given to PERE by Pierre Cherki, RREEF’s global head of alternatives and real assets, since Deutsche Bank’s disastrous strategic review of its asset management business in 2011. For a look at the firm’s plans going forward, turn to page 8. And for a highly-entertaining read on one of those newly arrived stars I mentioned earlier, allow me to also flag Jonathan Brasse’s interview of Arch Capital on page 30.
There’s plenty more in this issue about firms and investors, both old and new. See if you can identify those that will be longstanding superstars and others that might be flashes in the pan.
Enjoy the issue,