Swerdlow to leave Waterton amid strategic disagreement

The president of the Chicago-based private equity real estate firm is departing as the company holds a first close on its latest multifamily fund. 

Marc Swerdlow, president and general counsel at Waterton Associates, is leaving the Chicago-based multifamily investment firm, following a decision made by Waterton’s partners. Swerdlow will remain at the company until April 18.

According to Swerdlow, his exit from Waterton resulted from disagreement between him and the two other partners, David Schwartz and Pete Vilim, about the level of control that each would have over the strategic direction of the company as well as its day-to-day operations.“There were probably blurred lines between my role as president and David's role as CEO,” said Swerdlow, whose impending departure was communicated to investors last week. “We thought it was best that I leave and pursue other opportunities.”

Swerdlow is one of three members of the firm’s executive committee, along with Schwartz and Vilim, and is identified as a key man on one of Waterton’s previous real estate funds. However, he currently is not listed as a key man in its latest real estate fund, Waterton Residential Property Venture XII. While Waterton will not hire a replacement for Swerdlow’s role as president, Erin Ankin, formerly the firm’s assistant general counsel, already has assumed his general counsel duties. Waterton declined to comment.

PERE understands that Swerdlow’s departure coincides with Waterton’s first close on the new fund, raising approximately $200 million. The firm launched the vehicle last spring, with a target similar in size to its $500 million predecessor fund.

Swerdlow joined Waterton as general counsel 13 years ago, about six years after Schwartz’s and Vilim’s founding of the firm in 1995. He became president and a five percent partner in the company in 2010. Following Swerdlow’s exit from the firm, Schwartz and Vilim will go back to each owning 50 percent of the firm, compared with 47.5 percent previously. Currently, Waterton oversees 54 investments totaling approximately 20,000 units in 14 states.

Over the past 14 months, Swerdlow had helped to recruit a number of senior hires at the firm, including a new chief financial officer, Doug Denyer, new chief investment officer, Rick Hurd, and new head of investor relations, Michelle Wells.“We’ve got a great senior leadership group now,” Swerdlow said. “Waterton is positioned for growth with or without me.”

Swerdlow expects that he initially will take some time off after leaving Waterton, but intends to stay within the multifamily sector. He currently is in discussions with a few groups and expects to take on a new partner position at a newly formed or existing firm by the end of the third quarter.

Prior to Waterton, Swerdlow was a senior investment manager at GE Capital Real Estate, where he was responsible for structuring and closing structured debt and joint venture transactions. Before GE, he served as senior vice president at Heitman for 11 years, where he was involved in structuring and closing acquisitions and dispositions in commercial real estate.