Rockpoint Group, the Boston-based real estate investment manager, has announced its arrival on the European property fund scene with the hiring of two new professionals to run two offices on the continent.
Late last year, the firm appointed Michael Gerlich as director of acquisitions in Germany. Gerlich, who will be based in the firm's new Frankfurt office, joins from a stint as manager director (Germany) with GE Commercial Financial Real Estate, where he was responsible for corporate and portfolio acquisitions. He also spent a period as head of operations in Germany, Austria, Switzerland and Central Europe for Lend Lease Real Estate Investments.
On the other side of the North Sea, Rhys Lewis has joined Rockpoint to head up its London office and become director of acquisitions in the UK. He joins from Moorfield Group Limited. Lewis has also worked in acquisition analysis, asset management and real estate development at Carisbrooke Investments, and in real estate structured finance and financial risk management for JC Rathbone Associates.
Jonathan Paul, one of the firm's co-founders, is overseeing Rockpoint's expansion into Europe. Paul says that the firm had made a conscious decision to focus on investments in other regions when Rockpoint was formed in 2003. “The real estate fundamentals in Europe were lagging behind what we were seeing in the US and Japan,” he says. “We decided to target Europe in late 2004, when we began to see real estate fundamentals firming in some European markets such as the UK and distressed opportunities emerging in other markets such as Germany.”
This change in focus is clear from the way the firm's investment mandate has altered from fund to fund. Only 35 percent of Rockpoint Real Estate Fund I, which raised $900 million, was allocated overseas. By comparison, 45 percent of its follow-up vehicle, which closed on $1.7 billion, is dedicated to non-US assets, giving the firm twice as much firepower to invest in foreign markets.
Within Europe, Rockpoint plans to invest in office, multifamily, hotel and retail assets, although Paul says the firm will steer clear of more esoteric sectors, such as care homes for the elderly, at the moment. He added that, although the firm is potentially interested in all Western European countries, its attention is likely to focus on the region's largest markets. “We're focused on acquiring assets that are poorly positioned, where full value isn't being realized,” he said. “You need strong liquidity to be able to take advantage of these opportunities.”