Edward Siskind, the head and chairman of Goldman Sachs Real Estate Principal Investment Area (REPIA) is to retire at the end of the year, ushering in a new era for the global heavyweight.
According to a memo sent on Monday to REPIA’s staff and investors, Siskind’s retirement is part of recent changes in leadership within Goldman Sachs Merchant Banking Division, which includes the appointment of his successors, Alan Kava and James Garman as incoming co-heads.
Under the new arrangement, Kava, formerly REPIA’s head of North America, will lead the business from Goldman Sachs’ New York office while Garman, formerly head of Europe, will do likewise from its London office. Both will report to Richard Friedman, head of the Merchant Banking Division, which controls REPIA. Friedman will also assume Siskind’s responsibilities as REPIA’s chairman.
Goldman Sachs also said Jean de Pourtales, another member of REPIA’s investment committee, would retire at the end of the year, following 23 years with the platform.
Siskind’s retirement and the selection of successors closely follows the resignation of Richard Powers, formerly co-head of REPIA in the Americas, just over four months ago. At the time of that announcement, staff were told Siskind would relocate from London to New York to continue to lead the platform, which currently has about $34 billion of assets under management.
His retirement brings down the curtain on his tenure with the Wall Street bank stretching more than 20 years and culminating in him becoming sole head of the platform in September 2009 following the departure of co-head Todd Williams. He became co-head after the retirement of Stuart Rothenberg at the end of 2008.
He was a founding partner of REPIA in 1991 and has helped guide it into a business which has raised more than $26.5 billion of capital and completed more than $170 billion of investments for its various funds, including its well known Whitehall Street Fund series.
During his time at the helm there have been persistent rumours among industry players that REPIA was in the process of being wound down or retrenching. However, in the memo sent this week – seen by PERE – Goldman Sachs said it was continuing to focus on managing and maximising the value of the existing portfolio of $34 billion in real estate assets worldwide, and investing the GS Real Estate Mezzanine Partners and Whitehall Street International 2008 funds.
Our real estate team continues to be supported by the broader Merchant Banking Division
Goldman Sachs memo seen by PERE
“Our real estate team continues to be supported by the broader Merchant Banking Division, as well as by the team of over 1,000 professionals globally at Archon, who are dedicated to creating value for our investors,” said the memo signed by Friedman, Garman and Kava.
“Through the financial crisis, the MBD real estate team and the firm have been committed to the proactive management of the funds’ investments, optimizing operating performance in a difficult environment and opportunistically harvesting where possible. We feel that market conditions are now beginning to improve and our efforts over the last 18 months have stabilized operations and provided our portfolio investments with improved capital structures; as a result, we believe we are better positioned to take advantage of harvesting opportunities as the markets continue to recover.”
The memo continues: “Notwithstanding our challenges, we have also enjoyed some successes: Since 2010, the teams have been focused on investing in mezzanine and senior debt positions in GS Real Estate Mezzanine Partners (GSREMP) and in non-performing and sub-performing real estate loan portfolios in Whitehall Street International 2008. The lack of liquidity in the markets has created higher quality investments with better credit characteristics for the GSREMP fund than originally anticipated.”
“In addition, we are beginning to see opportunities unfold in Europe for Whitehall Street International 2008. We continue to have substantial capital available to invest in both of these strategies.” We feel that market conditions are now beginning to improve and our efforts over the last 18 months have stabilized operations and provided our portfolio investments with improved capital structures; as a result, we believe we are better positioned to take advantage of harvesting opportunities as the markets continue to recover
Goldman Sachs memo seen by PERE
Under another subheader called “Harvesting Activity”, the firm said it remained focused on managing the current portfolio and monitoring the markets for “optimal disposition strategies” for our investments. “Harvesting has been active in all regions over the last 18 months. Notable events include the sales of Alkas Realty (Singapore) and Shanghai Garden Plaza (China) and the recent IPOs and associated harvests of GSW (Germany) and Accordia Golf (Japan),” it said.
In terms of portfolio management, the memo explained how the team had “successfully reduced leverage and extended debt maturities” across its portfolios in order to better position its investments for sale in an improved market environment.
Successful restructurings have been executed in all regions, including Equity Inns, Hilton Hotels, KarstadtQuelle and most recently, Tharaldson Hotels.
The memo concludes: “We continue to actively pursue accretive debt restructurings, aggressively manage operating performance for remaining investments and identify new opportunities within the active investing strategies.”
Goldman Sachs declined to comment when contacted.
Siskind to step down as Goldman Sachs REPIA head
End of an era at the $34 billion global real estate giant as founding member Edward Siskind prepares to retire. His responsibilities as head of the platform will fall jointly to Alan Kava and James Garman.
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