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UBS reshuffles US real estate leadership amid core fund woes

The Swiss investment bank has replaced its top two real estate executives as part of efforts to get its $30bn US platform back on track.

UBS: facing a long line of exits from its ODCE fund

UBS Asset Management has replaced its top two real estate executives as part of an effort to get its $30 billion US platform back on track.

Matt Lynch, the long-time head of US real estate for UBS’s Real Estate & Private Markets business, and Jack Connelly, head of real estate transactions, have left the Zürich-based bank to “pursue other opportunities,” according to a source close to the firm. The source declined to say whether Lynch or Connelly left voluntarily or were dismissed. UBS declined to comment on the departures.

Lynch and Connelly have been replaced, respectively, by Matt Johnson and Rod Chu, both of whom were promoted this week. Johnson, a 12-year UBS veteran, was elevated from his prior role as head of the bank’s multi-managers real estate business in the Americas. He will report to the head of Real Estate & Private Markets, Joe Azelby, in UBS’s Chicago office. Chu is a senior portfolio manager who oversees the open-end Trumbull Property Income Fund from San Francisco.

The shake-up comes as part of UBS’s efforts to steady its US real estate business, and particularly its flagship open-end diversified core vehicle, Trumbull Property Fund. The fund has been hit with a crush of redemption requests during the past two years fueled by lackluster returns. At the last count, the $16.7 billion vehicle had more than $6 billion of requests to satisfy, creating a years’ long backlog for exiting investors. Most recently, the Kansas Public Employees’ Retirement System sought a full redemption of its $205 million investment from the fund at its January meeting. UBS ended 2019 by offering investors a 25 percent discount on the fund’s base fee if they agreed to lock up their capital for four years, PERE reported.

UBS has spent the last year overhauling its Real Estate & Private Markets platform, which manages $110 billion of real estate, infrastructure, farmland and private equity assets. In March 2019, the bank hired Azelby to run the business. A former professional football player, Azelby ran JP Morgan Asset Management’s $88 billion global real assets business for 18 years before undertaking a one-year stint at Apollo Global Management.

In addition to reorganizing its US real estate direct investment business, the firm has shifted resources towards multi-manager platforms for real estate and infrastructure, PERE understands.

Azelby, in a statement issued Tuesday, praised Johnson and Chu for their leadership experience: “Matt Johnson and Rod Chu are both proven leaders and talented investors and I have every confidence they will successfully drive the business forward and enable us to deliver on the outcomes our clients demand.”

David Kozlicki, head of fund investment for UBS’s multi-managers real estate platform, will replace Johnson as head of that business. Chu will continue to manage the firm’s real estate income strategy along with fellow portfolio manager Chris Clayton until a replacement is appointed.