Last month, CBRE Global Investors, one of the world’s largest real estate investment managers, announced that it had created an important new role – global chief investment officer.
The person that the Los Angeles-based firm tapped for the position, Ritson Ferguson, is chief executive officer and co-CIO of CBRE Clarion Securities, the company’s global securities business. CBRE Clarion manages more than $25 billion of assets, or roughly a quarter of CBRE Global’s total $88.4 billion portfolio.
In an interview with PERE, chief executive Matt Khourie explained that the company has historically had chief investment officers for each of its business units and regions, but decided to create a global CIO role amid rising interest from its largest clients in cross-border opportunities. In fact, the firm – which has more than 300 offices across the US, Europe and Asia – anticipates that approximately $2 billion of the capital that it raises this year will be directed at cross-border investments – by far the largest volume of cross-border capital for the firm to date, according to Khourie.
“As these clients are working with us to look for interesting opportunities around the world, they really want and deserve a consistently applied global investment strategy and investment execution,” he said. “So when you look at that as a backdrop, it really makes sense for us to have a global CIO position to better link our business units and regional CIOs.”
Ferguson will remain in his co-CIO post at CBRE Clarion while also overseeing the approximately dozen CIOs of CBRE Global’s various business units and regions. He said the firm will be thinking across the spectrum of listed and unlisted real estate as it seeks to develop products for the defined-contribution marketplace.
CBRE Global is the latest real estate investment manager to create a global chief investment officer role in recent years. In January, The Blackstone Group’s real estate unit promoted Ken Caplan, its European head, to the newly created post, while BlackRock Real Estate made Simon Treacy its first global CIO following the acquisition of MGPA in 2013.
“Over the last seven or eight years, our industry has become much more of a global industry,” Khourie said. While that globalization is in large part due to increased cross-border activity by the world’s largest property investors, it also is the result of consolidation in the private equity real estate industry and the growth of its largest firms. CBRE Global, for example, became the world’s biggest real estate investment manager and significantly increased its operations in the US, Europe and Asia after parent company CBRE Group completed its takeover of ING Real Estate Investment Management in 2011.
“The bigger players are a lot more active in the industry, and the bigger players tend to have a global footprint,” he said. “So when you think about those two elements, it really makes sense for the bigger firms that have a global footprint to have a global CIO.”
Even so, Ferguson did not anticipate that a global CIO role would become widespread in the industry. “Even today, I think there are less than a handful of firms that have the scope and scale of ours,” he said. “There may be aspirants to that, but there still is a relatively small number.”
CBRE Global’s new global CIO co-founded one of the firm’s most successful businesses
Ritson Ferguson is not well-known in the private equity real estate space, but is considered a pioneer in the real estate investment trust industry. He is chief executive officer and co-CIO of CBRE Clarion Securities, the company’s global real estate securities arm, which chief executive Matt Khourie considers to be “one of our most successful businesses.”
Ferguson co-founded CBRE Clarion Securities’ predecessor firm, Campbell Radnor Advisors (CRA), in 1991. CRA became an affiliate of Clarion Partners in 1995, and the resulting entity was acquired by ING Real Estate Group in 1998. ING Clarion Real Estate Securities then became part of CBRE Global in 2011, when parent company CBRE Group acquired ING Real Estate Investment Management. Earlier, Ferguson held direct real estate investment positions at Radnor Advisors and Trammel Crow Company.
“When you look at Ritson’s background, it’s really a perfect fit for the role, because Ritson has been investing globally for most all of his career, and he has had experience both in the REIT space but also in the direct space,” Khourie said.