Top trends of 2007: western firms go global

PERE looks back at the year just passed for the trends that mattered most. Today we look at trend number three - in 2007 Western firms raced to expand their investment mandates globally and to hire people with the right experience and outlook for the job.

The year 2007 was a tipping point for many Western investment firms, which realized that the world outside of North Americaand Western Europe is big, complicated, and holds forth the promise of very attractive returns. Accordingly, Western firms scrambled to hire people to guide them through the emerging markets.

In October, Citi Property Investors, the real estate investment management arm of Citi Alternative Investments, nabbed international real estate investor Shanti Sen from the government of Singapore’s investment division, GIC, where Sen was senior vice president and head of the corporate investment group. Based in Citi’s New York office, Sen will work with the firm’s regional centers on global investment opportunities in her new role as managing director and head of merchant banking.

In the same month, JE Roberts appointed former GE Real Estate head, Michael Pralle, as president and chief executive, continuing the firm’s push to increase its global presence. Having spent an 18-year career at GE Real Estate, Pralle oversaw GE’s global business operations including investment activities in the US, Europe and Asia. Pralle also garnered considerable international experience from his six years in the London and Hong Kong offices of management consulting firm McKinsey and Company.

CBRE's Menifee

Other firms created positions designed to force a more global orientation. CBRE Investors, the Los Angeles-based private equity real estate firm, promoted Lee Menifee to director of global strategy this year, a newly created position within the firm. Menifee had served as a senior director in the firm’s global research team.

New territories were claimed. The Blackstone Group opened an office in Tokyo this year—its third office in Asia after Mumbai and Hong Kong. The firm appointed Alan Miyasaki, a managing director in the firm’s real estate division, to head its new Tokyo office and spearhead Blackstone’s real estate investment activity in the country.

Private equity real estate firms have also been expanding their reach to Latin America. The Carlyle Group’s recently formed Latin America real estate team, headed by Eduardo Machado, comprises professionals based in Sao Paulo and Mexico City. Machado, based in Sao Paulo, was managing director at Fibra Realty, the real estate company of the Vicunha Group, prior to joining Carlyle. Machado was founder and president of one of the first securitization companies in Brazil and also structured one of the first REITs in the country.

Headhunters reported fevered interest from Western firms to hire seasoned real estate investors in the emerging markets. In many of these markets, the supply of talent is even more limited than the supply of investable real estate.