This month’s issue of PERE is all about being big. Not that we are saying ‘large’ is the only way for private equity real estate businesses to be; clearly, there is room for mid-sized and smaller players. Still, every now and again, we give way to the temptation to measure.
So it is that PERE’s editorial and research teams have spent the past few weeks analyzing all the firms in the industry and, in the magazine before you, we proudly present the largest 50 private equity real estate firms in the world. From page 33 onwards, you will discover all the major players as quantified by our unique (if not, at times, a little arbitrary) methodology of how much capital has been raised for value-added and opportunistic strategies over the last five years. If you are a general partner reading this, you will no doubt look to see if you made the cut. If you didn’t, maybe it will spark further ambition in this industry of business builders.
For those GPs not yet on the list, there is certainly another feature I can recommend. On page 30, Evelyn Lee takes a look at those on the fundraising trail and discovers that managers are having to offer fee breaks now more than ever in order to draw investors into first closings. It is the thing to do apparently and, without such fee inducements, raising a fund would be tougher still.
Also in this issue, we turn the spotlight on someone for whom ‘go big or go home’ seems to be a personal motto. Jonathan Brasse discovered in our Blueprint interview, Jeff Schwartz is building his Global Logistic Properties into a new worldwide powerhouse to perhaps match his previous employer, ProLogis. Starting on page 22, we profile the man whose backers include some of the largest global investors out there.
Another company that certainly has shown no major hiccups in raising big chunks of capital is Barry Sternlicht’s Starwood Capital Group, which has rocketed up the PERE 50 ranking on the back of raising its largest opportunity fund to date. James Comtois analyzes the firm’s latest effort and assesses how fees and inducements played a part. You can find his report on page 9 of the Americas news section.
Although big can be a measure of success, even people like Schwartz carry around a warning about being big in the back of their mind. “Of course, there’s always risk when pursuing growth for growth’s sake,” he said in the interview. “One must know how to be defensive when the need arises.”
That’s good advice.
Enjoy the issue,