After closing its second fund last year on $150 million, San-Franciscoheadquartered private equity real estate secondary firm Liquid Realty has not just been busy looking for deals – it's also been actively building out its own infrastructure.
First, Liquid nabbed Andrew Jensen, former senior controller of San Francisco middle-market buyout firm Gryphon Investors, as its director of finance. Now, Josh Cleveland, a former vice president at private equity asset management firm Capital Dynamics, has joined the secondary specialist as director in charge of business development.
Though Cleveland enjoyed successes at Capital Dynamics – he was instrumental, for example, in winning a major mandate from the Washington State Investment Board, beating out veteran consultant Pacific Corporate Group – he notes that he was eager to move to the investing side of the business.
“Liquid Realty is a principal investment firm, which provides the opportunity to be much more involved in all aspects of the deal process,” Cleveland says. “In addition, given the firm's focus on the developing real estate secondaries market, it's well positioned to grow in the years ahead.”
At Liquid Realty, Cleveland will focus primarily on transaction origination and capital raising, bringing a strong roster of institutional investor relationships to the firm.
“I've been active in both the European and US markets, developing a deep network in the institutional investor community,” he says. “At Liquid Realty, we hope to translate these relationships into new opportunities.”
Although most of Cleveland's exposure has been in traditional private equity secondaries, he notes that Capital Dynamics managed several real estate fund investments – in fact, Cleveland's involvement in that business line was how he first met Scott Landress, the founder of Liquid Realty.
“I'm an educated novice,” he says, referring to his real estate background. “That exposure whetted my appetite.”
Although Cleveland will be based in the company's New York office, for now, he is spending approximately six months in the San Francisco headquarters in order to become better acquainted with the company and its employees, a group that may expand even further in the future.
According to Landress, “We're always looking to attract bright candidates. And in the near-term, we plan to bulk up our acquisition team by bringing in one or two more real estate investment professionals.”
JER Partners adds two
McLean, Virginia-based JER Partners, the private equity arm of real estate investment firm JE Robert Companies, has hired Frank Small and Michael Cocanougher. Small, who previously founded Crescent Capital Partners, has been hired as director of fund investment management and will be based in the firm's McLean offices. Prior to Crescent, Small was also a principal at New York private equity real estate firm Barrow Street and a vice president at Blackacre Capital, the real estate arm of Cerberus. Cocanougher, who previously spent eight years at JER, is returning to the company as a director of CMBS investments, based in the firm's Dallas office.
Spectrum grabs Blackacre pro
New York-based Spectrum Group Management has hired Peter Locke, a former managing director with New York-based private equity real estate investor Blackacre Capital, as a principal at the firm. Locke, who spent six years at Blackacre, will focus on origination and execution at Spectrum, which manages approximately $250 million in a number of real estate-related hedge and debt funds. Typical investments for the firm include first mortgage, mezzanine and participating loans, as well as distressed participations of public and private securities.
Ohio School Employees loses real estate head
Malcolm Goepfert, a senior investment officer at the $9 billion School Employees Retirement System of Ohio, has left the pension fund to take over the alternative investment program at the WK Kellogg Foundation, a $6.8 billion charitable endowment established by the breakfast cereal entrepreneur. Goepfert spent five years at Ohio where he was responsible for the fund's $900 million real estate portfolio as well as its $175 million private equity program. Ohio, which maintains a 10 percent allocation to real estate, generated a return of 10.5 percent for the fiscal year ended June 30, 2005 – with a return of 22.3 percent, real estate was the strongest performing asset class.
Cincinnati hires CIO as it ponders move
The University of Cincinnati has hired Tom Croft, the former chief investment officer of fixed income at DuPont Capital, as its first chief investment officer. As its funds under management grew to approximately $1 billion, Cincinnati reportedly decided to create a more specialized investment effort. The university endowment is also in the process of conducting an asset allocation review which could lead to changes in the endowment's portfolio. The school currently has approximately 10 percent invested in alternatives, including private equity, hedge funds and real estate.
AMB names PE veteran to board
San Francisco-based developer AMB Property Corporation, which recently closed its first Japanese private equity real estate fund, has named Afsaneh Beschloss to its board of directors. Beschloss is president and chief executive officer of The Rock Creek Group, formerly Carlyle Asset Management, an investment firm focused on private equity and hedge fund investments. Previously, Beschloss was treasurer and chief investment officer of the World Bank.
New RE head at Deutsche Bank
Deutsche Bank has named New York-based Devin Murphy global head of its real estate investment banking group. Prior to joining Deutsche Bank in 2004, Murphy was head of US real estate investment banking for Morgan Stanley. He succeeds Jacques Brand, who will focus on his other position as US co-head of corporate finance.
Broadway, Investcorp sell NY offices
New York-based private equity real estate firm Broadway Real Estate Partners and global investment group Investcorp sold two office buildings on Long Island for a reported combined price of $137.5 million (€113 million). The two buildings were part of a three-office portfolio acquired by Broadway since 2001 – Investcorp purchased a 50 percent stake in the office group via a recapitalization in 2004. The first building sold, 3 Huntington Quadrangle in Melville, New York, fetched $84 million from AEW Capital Management. The other building at 1979 Marcus Avenue in Lake Success, New York was sold to Lincoln Equities Group and the Willet Companies for a reported $53.5 million. The third property in the portfolio, a 236,000 square foot office in Westchester County, is currently on the market.
JER acquires two apartments
A joint venture between McLean, Virginia-based JER Partners and Beverly Hills-based operating company FSC Realty recently acquired two apartment complexes for a total of $56 million (€46 million). JER and FSC acquired the Summit at Lenox, a 431-unit mid-rise development located in Atlanta, Georgia, for $30 million. The companies also acquired Covington Farms, a 352-unit apartment complex in Everett, Washington for $26 million, which is located near Boeing's 7E7 Jetliner assembly plant. Last April, JER and FSC acquired a multi-family property in Federal Way, Washington.
Oaktree rolls dice on Cannery
Los Angeles-based Oaktree Capital Management is making an equity investment in casino operator Cannery Casino Resorts. The details of the transaction were not disclosed, but Oaktree now has an ownership interest, around 33 percent, in the gaming firm. Cannery operates the Cannery Casino & Hotel and the Rampart Casino, both considered “local” casinos in Las Vegas. Cannery is also receiving $300 million (€246 million) in senior credit from Banc of America Securities. Oaktree's Principal Opportunities Group manages around $4 billion in private equity investments. Founded in 1995, the firm has $28 billion in assets under management and has additional offices in New York, London, Frankfurt, Singapore and Tokyo.
Blackstone books LA student housing
Los Angles-based developer Urban Partners is teaming up with New York-based Blackstone Real Estate Advisors on a 421-unit student housing development to serve the students of the University of Southern California. The eight-story University Gateway, costing a reported $135 million (€111 million), will house more than 1,656 students; USC is planning to lease space on the first floor for a student bookstore and fitness center, to be joined by additional tenants. The development is slated for completion in fall 2008. Blackstone has been involved with student housing in London since 2004, when it formed a joint venture to turn two former Royal Bank of Scotlandoffice buildings into student residences.
Halcyon in luxury Toronto hotel deal
Boston-based Halcyon Ventures is partnering with Bay-Yorkville Developments, a joint venture between Toronto-based Menkes Development and Lifetime Homes, to develop a new 256-room luxury hotel with Kingdom Hotels. Four Seasons Hotels and Resorts has agreed to operate the hotel, which is set to be part of a complex that will also include Four Seasonsbranded condominiums and highend retail shops. The mixed-use development will be located in Toronto's Yorkville district, a few blocks from the Four Seasons Hotel Toronto, and has a C$325 million ($266 million; €219 million) price tag. Halcyonwas formed last year by Martin Zieff and Mark Potter, both former principals at AEW Capital Management.