Investing in talent can mean many things in real estate, from hiring an individual to striking joint ventures with development partners or buying out whole teams. However, the issue is the same: there is a shortage of talented individuals out there. On the other side of the equation, there is a shortage of willing capital ready to invest a minority stake in small companies set up by individuals wishing to branch out by themselves.
Where the two issues might be resolved in Europe is in a European incubator platform launched by UK venture capital and fund management firm, Palmer Capital Partners, using the same concept applied in New York by firms such as Capital Z Investment Partners, which has seeded start-up hedge fund managers.
Unveiling its strategy during last month's Expo Real trade fair in Munich, Palmer Capital said it plans to take minority stakes in startup property companies throughout Europe including Eastern Europe, and launch a series of pan-European core and core-plus funds to match its model in the UK.
The firm, led by Ray Palmer and, in Europe, by Guy Barker, typically takes a 33.3 stake in companies being set up by people in their 30s and 40s eager to strike out on their own. “We provide the soft costs, except salary, of setting up,” said director Alex Price.
The European platform will be based in Munich. Barker is a former joint managing director of European business at Invesco. He told the conference crowd: “I received a call from [Palmer Capital director] Rupert Sheldon, who told me PCP wanted to find future capital opportunities in Europe. I was in the taxi at the time. I thought: 'I can immediately think of five to six, maybe seven to eight. There are a lot of people looking to fund property developments but a lot fewer opportunities to fund projects. Few providers are prepared to take a minority stake rather than full control.”
Palmer Capital was launched in 1992. The venture capital division has taken stakes in eight UK development companies, while the fund management business manages five opportunity and value added funds.