EUROZONE: Old guard, new futures

We all look at signs for how much things have changed. Data, rankings, statistics etc…they all help. Then there are other pegs not quite so easy to quantify or express: an old photo, a memento, a moment.

One poignant, yet nebulous moment arrived during the annual MIPIM property show in Cannes in the south of France in March 2013. As a hoard of property professionals streamed along the busy La Croisette – some young and fresh faced – two experienced-looking, more mature gentlemen wearing cool shades stood out as they kind of walked and talked more slowly without getting a hurry-on or even seemingly having a destination in mind. They were Mark Newman and Edward Siskind, the former global co-head of Lehman Brothers Real Estate Private Equity and global head of Goldman Sachs Real Estate Principal Investment Area, respectively.

Having known both for a while and having stayed in touch, particularly with Newman who kindly agreed to be chairman of PERE’s Europe Summit one year, it seemed right to approach. “How are you doing, gentlemen! How’s life, busy?” I said it cheerily, but instantly regretted the question, as both sort of glanced at the other and then back at me and with a hint of sarcasm said something like: “Yeah, really busy.” That’s how I remember it anyway.

You see, just seven years ago this scene would have been unthinkable. They would have been constantly stopped on that Croisette strip by people offering handshakes and fast small talk. Indeed, it is unlikely they would have been out in the sunshine like this at all – more likely they would be holed up in a hired five-star hotel suite or on board a yacht somewhere, churning through a shopping list of pre-arranged meets with bankers to discuss high-powered deals. Yet, it was 11.30am on Wednesday March 20 when MIPIM was beginning to get into full swing and here they were near Les Palais des Festivals largely ignored, perhaps not even recognized by the current crop of upwardly-mobile European property jet-setters.

Newman had left Lehman Brothers five years previously to set up Broadcliff Capital Partners in London to manage certain of the European assets, and Siskind retired three years later in December 2011 after a 20-year career at Goldman and took up a low-key role on the advisory board at Bridges Ventures.

To many in the private equity real estate industry in Europe, here were two people that were easily in the top five most-influential principal investors of the mid-2000s that now played a fringe part in a play that didn’t feature investment banks managing mega-funds anymore. Well-liked and respected though they are, it was hard for people to think of them as influential players. They both seemed to be heading quietly for the exit.
Except, as the smash hit song by Charli XCX goes: “Boom, clap, the sound of my heart, The beat goes on and on and on and on and on and, Boom clap you make feel good, come on to me, come on to me”. It turns out that both are suddenly getting back to the game that excites them most and cannot leave alone!

As PERE revealed recently, Newman has suddenly relocated to Japan to become head of Asia real estate investing for Dallas-based Lone Star Funds – a huge and influential position. Meanwhile, Siskind is building an investment business, approaching various sources of capital in the US, and has been joined by Ramón Camina-Mendizabal, who was head of real estate finance for the EMEA region at Goldman Sachs.

If both of these moves work out, it will be a remarkable return to something. Prominence perhaps. Influence. Investing certainly.

Someone once said that “the trouble” with private equity real estate is that nobody ever dies. Behind the statement is a feeling that several people who played significant roles at some of the most influential firms were partly to blame for things spiraling out of control. At the same time, there are those in the industry that have survived mistakes by franchises they worked for or had reputations tarnished by association, yet have proven themselves to be ‘good guys’ in the eyes of investors and have carried on.
I confess to not knowing enough of the inside track about Lehman Brothers and Goldman to pass any kind of judgment beyond saying that I haven’t heard personal criticism of either Newman or Siskind. So with that, good luck to them both.