Strategic investors

Richard Ellis (CBRE) has closed its latest domestic real estate fund on $1.2 billion (€967 million), more than double its predecessor. The vehicle, Richard Ellis, is a value-added discretionary fund with a focus on the multi-family, office, industrial and retail sectors in major US markets.

“We see a fairly positive economic environment in which to invest,” says Michael McMenomy, global head of investor services at CBRE Investors. “We believe that the economy has been changing over the past year from a consumer-led expansion to a business-led expansion.”

McMenomy adds that the firm is seeing opportunities in business-related property sectors, like office and industrial, as well as high-end residential.

CBRE Investors geographic focus is on “international-oriented markets” in the US, including the San Francisco Bay area, Southern California, New York City and Chicago. For residential projects, the group is interested in urban infill and supply-constrained submarkets.

The fund, which had a target between $800 million and $900 million, will have total purchasing power of more than $3.5 billion, including leverage. It will be looking to acquire and reposition properties, as well as development projects, and will invest both equity and mezzanine debt. The group's Strategic Partners platform usually employs around 50 to 70 percent leverage and targets returns of 15 percent to 19 percent.

Limited partners in the fund include more than 30 US and offshore institutional investors. “Many investors in the [fourth] fund have been follow-on investors with Strategic Partners,” McMenomy says.

Three previous domestic Strategic Partners funds have invested $2.8 billion in more than 45 investments since 2000, with the group's last fund closing on $500 million in late 2003. CBRE Investors also has two UK-focused funds and two Europe-focused funds in the Strategic Partners platform.

The independently operated investment group was founded in 1972 and has more than $15 billion in assets under management under a variety of strategies.

Colony closes $1.2b fund
Los Angeles-based private equity real estate firm Colony Capital has held a final close on Colony Investors VII, which raised a total of $1.2 billion (€1.0 billion). The opportunity fund will target the US, Europe and Asia, though a majority of the fund is expected to be invested in assets outside the US. Last year, Colony, which currently manages more than $6.1 billion in equity capital, acquired the Raffles Hotel chain for approximately $1 billion.

Starwood Capital creates new hotel brand
Greenwich, Connecticut-based private equity real estate firm Starwood Capital has announced a new luxury hotel brand, the Crillon, which will be developed in cities around the world. Starwood acquired the Hotel de Crillon in Paris last year as part of its €1.2 billion ($3.2 billion) acquisition of Group Taittinger. Speculation had been growing that Barry Sternlicht, founder of Starwood Capital, would use the Taittinger hotel assets to build a brand name similar to the W and St. Regis brands that he developed while chief executive officer of Starwood Hotels. Last year, Starwood Capital closed an $800 million fund focused on the global hospitality sector.

Landmark closes $368m secondary fund
Landmark Partners, the Simsbury, Connecticut-based private equity and real estate secondary investor, has held a final close on its fifth real estate fund, raising a total of $368 million (€300 million). Landmark Real Estate Partners V, which exceeded its initial target of $250 million, also surpassed the firm's previous vehicle, which closed on $270 million in 2002. Founded in 1989, the firm has raised 18 funds focused on venture capital, buyout, mezzanine and real estate partnerships totalling more than $4.6 billion.

Madison Marquette to debut fund
Washington, DC-based shopping center developer Madison Marquette has hired placement agent Presidio Partners to raise the company's first opportunity fund. The investment vehicle, which is targeting $350 million (€285 million) of equity, will seek returns of 18 percent and will have approximately $1.2 billion of purchasing power when fully leveraged. Founded in 1992, Madison Marquette is a division of international investment firm Capital Guidance Corporation. Since its inception, the company has initiated 33 investments with a total gross transaction value in excess of $1.6 billion.

Williams raises 1st opportunity fund
Williams Realty Advisors, an Atlanta-based investment firm, recently closed its first private equity real estate fund on $100 million (€80 million), targeting development opportunities in commercial and residential properties in the Southeast and Mid-Atlantic. Williams Realty Fund I, which set an initial target of $50 million, will pursue projects being developed by the nine other real estate ventures overseen by John Williams, the company's chief executive officer and the founder of Post Properties. The fund has already closed 12 investments requiring $31 million of equity.

Millenium hires new private equity head
New York-based real estate developer Millenium Partners has hired Nicholas Winter as a managing director in charge of the firm's private equity efforts. Winter will focus on acquisitions, growth opportunities, new product launches and overall strategy for the company. Previously, he worked at Blue Mountain Capital, a New York private equity firm, and Ameriquest Capital Group. Millenium Partners recently announced the acquisition of six properties from The Sports Club Company for $80 million (€65.1 million).

New CIO at Indiana
Shawn Wischmeier has joined the Indiana Public Employees' Retirement Fund as the pension fund's chief investment officer. Wischmeier joins from Eli Lilly where he formulated investment strategies for the company's pension plan, in addition to leadership roles in financial risk management and strategic capital management. A statement released by the pension fund pointed to Wischmeier's experience in alternative assets. Indiana PERF, which manages approximately $13.1 billion (€10.7 billion) in assets, is making a push into alternative assets such as private equity and real estate.

JER names CFO
McLean, Virginia-based real estate investment firm JE Robert Companies has named Michael McGillis as the chief financial officer of the company's equity division. He will primarily be responsible for the finance and accounting of JER's real estate private equity fund business. Prior to JER, McGillis was a vice president of corporate and regulatory accounting at Freddie Mac. He has also worked at Starcom Holdings/Constar International, AEW Capital Management and Price Waterhouse. In 2004, JER closed its third private equity real estate fund on $823 million (€670 million).

Ex-Oaktree pro starts new fund
Russel Bernard, a former principal at Oaktree Capital Management, has left to launch his own private equity real estate firm, Westport Capital Partners, which will look for opportunistic investments across the globe. At Oaktree, he was responsible for the firm's $2 billion (€1.7 billion) real estate fund program. Previously, he worked with the distressed debt team at Trust Company of the West (TCW). He began his career with Time Equities in 1983, leaving for Win Properties in 1986.

Changes at Morgan Stanley
John Carrafiell and Jay Mantz have been named coheads of Morgan Stanley Real Estate following the promotion of Owen Thomas to president of Morgan Stanley Investment Management. Carrafiell, who has been with the investment bank since 1987, was previously the head of Morgan Stanley's European real estate group, a position he has held since 1995. Mantz was previously the head of Morgan Stanley's real estate investing group where he was responsible for the firm's principal investment activities, including the MSREF funds and other institutional funds and accounts.