As one of the top US real estate investment professionals at The Carlyle Group, Andrew Chung was a key dealmaker in New York City for the Washington, DC-based private equity firm. Now, the real estate executive is using that same market expertise to start up his own business.
Chung was one of 80 investment professionals that made up Carlyle’s US real estate funds group, which is led by managing director Robert Stuckey. After 14 years at the firm, however, he left earlier this year to launch Innovo Property Group, a New York-based real estate investment shop. “Rob Stuckey has created a great real estate investing platform at Carlyle, and it was an extremely hard decision for me to leave,” said Chung, in an interview with PERE. “However, I wanted to pursue an entrepreneurial venture.”
Despite the current competitiveness of the New York market, he said he still saw some value “on a long term basis in investing in the office, retail and residential sectors in New York.” He added: “I believe there’s an availability of capital, in terms of both debt and equity.”
Chung, who was raised in New York, took the decision to target property sectors based on current demographic trends in the city and the fact that he had focused on those same property types while he was at Carlyle. As for Innovo’s New York focus, “my local market knowledge and broker network is extensive, based on my tenure at Carlyle,” Chung added. “I grew up here, I know the streets, I know where there’s mispricing in neighborhoods where there’s long-term value.”
Innovo initially will invest primarily on behalf of high-net-worth individuals, and also is looking to partner with institutional capital. It has the capability to deploy capital across different risk and return profiles, from core to opportunistic. However, Chung anticipates that the opportunity will lie predominantly in core and core-plus real estate over the coming year. The firm will target deals in the $25 million to $100 million range, where there typically are more off-market opportunities, and expects to close on its first investment sometime this year. Innovo also recently recruited its second employee, a senior associate.
At Carlyle, Chung was involved in the acquisition, financing, management and disposition of more than $8 billion of US real estate investments. Notable deals included the development of Orion, a 60-story residential building in New York; Riverside Center, a residential complex in Manhattan’s Upper West Side; and 650 Madison Avenue, an office and retail tower in New York that was sold to Crown Acquisitions and Highgate Holdings for $1.3 billion in 2013.
Prior to working on equity investments at Carlyle, Chung was part of the real estate finance and securitization group at CIBC World Markets. “This is a natural progression in terms of doing deals on my own,” he said.