To those who know him, Ellis Short is an intensely private man when it comes to business dealings. However, the former Lone Star Funds principal is back in the limelight whether he likes it or not as he looks to launch a European private equity real estate fund.
As revealed by PERE last month, Short has formed a new firm called Kildare Partners – perhaps named after County Kildare in Ireland, where he reportedly owns a home, although he is based in London. If his plans succeed, he will raise at least $1 billion of discretionary capital to invest in distressed European real estate and become one of the region’s firms with the most capital for opportunistic investing.
Those that know him say Short believes this is ‘his market’ now, with many European countries yet to reach the bottom in regards to their real estate markets. At the same time, the level of deal flow has persuaded him to finally come out of retirement.
Short started out at Lone Star alongside founder John Grayken and helped build the business into a global powerhouse. At one point in the late 1990s, he ran the firm’s business in Asia and was instrumental in managing one of its biggest single investments at that point, the takeover of the Korea Exchange Bank for $1.2 billion in 2003 following the restructuring of Korean financial organizations in the wake of the Asian financial crisis. That investment finally was sold last year to Hana Financial Group for $3.9 billion, giving Lone Star and its investors a
No matter how private Short might like to be, he hasn’t really been out of the public eye – certainly as far as Britain is concerned – these past few years. Having retired from Lone Star in 2008, the Missouri-born ally of Grayken decided to invest in a 30 percent stake in Sunderland AFC, an English Premier League football club in the north west of England. A year later, he assumed 100 percent ownership of the club.
Sure enough, headlines began to follow him around, particularly in the sports pages of newspapers, and today he moves in high places. Indeed, Sunderland’s vice chairman is David Miliband, the former leader of the British leftist Labour party, whose brother Ed is the currently leader.
Of course, there have been a few ups and downs during Short’s ownership of the club. In March, the decision was taken to sack the club’s
respected manager Martin O’Neill as the team’s results left them in perilous danger of being relegated from the top tier of English football.
Still, Short now has a new venture on his hands to go alongside his Sunderland AFC interest. With his attention firmly on European distressed real estate, he is expected to speak with investors over the weeks and months ahead on the way to a first close for his new vehicle, potentially this fall.
Those that know Short describe him as confident. Indeed, some former Lone Star staff appear confident too, with rumours that Short already has recruited a team for Kildare. If he follows the Lone Star model, observers said it is likely he would build a loan servicing business. Short, however, declined to comment.