EUROPE NEWS: Direct appeal

 PERE: Christian, you left real estate asset management to become the chief executive at Generali Real Estate just over a year ago. What were the motivations behind the move?

Christian Delaire: After more than 20 years in the real estate asset management world, including 15 years with AXA and five years with AEW, my motivations were two-fold basically. It was moving from something European to something truly global, and also after 20 years of asset management to move to the principal’s world and have direct access to the equity to be invested. The difficulty in our job is that you see opportunities in the market, and if you are an asset manager sometimes you need time before raising equity to implement the ideas that you have in mind, whereas if you are an insurer like Generali and you are keen to invest in real estate there is a match between the ideas you have, the opportunity available and the availability of capital. This makes life very different.

PERE: You mentioned that one motivation for your move to Generali Real Estate was to join a truly global outfit. What geographies shall we expect to see you active in over the next 12 months?

CD: I will tell you the countries that we want to be more present in, which include the UK, and the London market of course which is the biggest market by far in Europe so we want to be more present there for diversification purposes. We want to invest more in Poland, we want to invest more in Spain.

PERE: How about further afield?

CD: Further away we want to develop our presence more in Asia, significantly in fact. Again, it is the same story – growth prospects of course, but also diversification purposes. Our portfolio today is very European because that is the way it has been built over the years but we want to build more diversification and so Asia is a focus for us. The target is to have 10 to 15 percent of our portfolio invested there.

PERE: Does that mean Japan primarily?

CD: Of course, Japan as it is the biggest market, but China, Hong Kong, Singapore and also South Korea and Australia are markets for us. We have guys on the ground everywhere we operate, so that includes the UK and Asia now, we have made appointments and recruitments there. In Asia, we have hired Andy Tan as head of Generali Real Estate Asia and he was an external hire. The UK is headed by Tina Paillet who is head of UK and North America and she already worked for Generali before I joined. That’s something I have tried to do throughout my career, if you join a place and just hire externally that doesn’t send a great message. Especially when existing teams are good.

PERE: Having made hires in these geographies does that mean the Generali focus will be on direct investments in these regions, or will you up your exposure through fund investing?

CD: If you look at the markets where we are well equipped we will mainly do direct investments, managing ourselves. For the new territories where we would like to invest more, so if you were to focus on the UK and Asia, the idea is to go for partnerships with like-minded partners and contributing to the sourcing capabilities of course but getting access to their management resources, skills and knowledge of the market too. That is something that we try and do when we look at somewhere new. We have made some investments in funds in the past and we are still invested in some funds, but for the time being the route that we favor is direct or partnerships. We may, depending on the opportunities, decide to invest in funds but the focus is more on direct and partnerships.

PERE: Does the move towards more direct investing have anything to do with your experience as a dealmaker?

CD: Absolutely, my background was one of picking investments and not fund managers. At the same time, I’ve been a fund manager myself for quite a while, so hopefully I am able to ask the right questions. When we go for a partnership, selection of the partner or manager is essential. Of course you need to look at the strategy, the opportunity, but making sure that you have the right partner to execute the strategy is crucial.