Wafra Investment Advisory Group, the New York-based investment manager, is facing a sexual harassment case from one of its real estate vice presidents, one of the few real estate cases to become public in the #MeToo movement.
Last Friday, Sabine Kraut, a vice president in the New York-based real estate group, filed a complaint with the Equal Employment Opportunity Commission, a US federal agency, alleging that Wafra’s head of real estate, senior managing director Frank Lively, sexually harassed and discriminated against her, depriving her of advancement opportunities, during her six years working for Lively.
After Kraut told Wafra management about the harassment, Lively was fired at the end of April, according to the complaint.
“Wafra is committed to a safe and welcoming environment for all of our team members,” a firm spokesman said in a statement, declining further comment. “We were made aware of these allegations for the first time in the middle of April 2018. Following an immediate internal investigation Wafra took appropriate action.”
Lively began to subject her “to ongoing sexual harassment that was pervasive, continuous and egregious” until he was fired in April, the EEOC complaint said.
Kraut, through her attorney, declined further comment, and Lively could not be reached for comment.
Wafra, founded in 1985 and owned by the Public Institution for Social Security of Kuwait, a Kuwait City-based government body, manages $1.7 billion in real estate, according to its website. The real estate team runs multiple private equity real estate funds, including one focused on hotels and another, specifically for German investors, that invests in US multifamily. The firm has 23 known holdings in the US, according to real estate data provider Real Capital Analytics.
Lively joined Wafra in 1997. He previously ran his own firm and worked for a New York real estate consultancy. During his Wafra tenure, Lively also held various leadership roles with the Association of Foreign Investors in Real Estate, including 2016 chair and most recently, transition advisor. AFIRE’s chief executive Jim Fetgatter told PERE he had no comment on either the allegations against Lively or if the group would examine Lively’s conduct as it related to his AFIRE positions.
Kraut joined Wafra part-time during graduate school in 2004 then began working full-time in 2005, according to the EEOC complaint. She reported to Lively for hospitality projects until 2012, when she transferred to the asset management group, where he was one of her direct supervisors. That year, he began to subject her “to ongoing sexual harassment that was pervasive, continuous and egregious” until he was fired in April, the EEOC complaint alleges.
Lively’s actions, both in New York and on business trips internationally, allegedly included unwanted kissing and touching; sending personal “inappropriate, imposing and intimate” electronic and handwritten messages, some of which she included in the EEOC complaint; giving her expensive gifts; and denying her career opportunities.
Kraut said that in 2012, the firm’s HR department was “non-existent as it consisted of an office manager and former Pan-Am flight attendant” with no HR training. She claims the department is still ineffective because she has been “aggressively retaliated against by her peers, replacement supervisors and Wafra’s management despite frequently reporting such incidences to human resources.”
Kraut adds she was “constantly in fear for her physical well-being and safety” and feared retaliation if she alerted Wafra about the harassment. Earlier, Lively had said he would threaten other Wafra leaders if his professional position was compromised, the complaint said. For example, if Wafra’s chief executive ever threatened Lively’s career, Lively claimed he would hire a private investigator to follow the CEO, photograph him in compromising positions and send the pictures to Kuwait to damage his reputation.
Lively also visited Kraut at home on multiple occasions without an invitation, including as recently as March 31, according to the complaint. Since April 1, she has exited through her building’s freight elevator to avoid Lively and his private investigator, she said.
On international business trips, Kraut alleges Lively restricted her travel, directing her to sit next to him on overnight flights and forbidding her from visiting her ailing mother on weekend trips unless he accompanied her, while their colleagues were free to make personal plans.
Professionally, Kraut alleges Lively denied her two promotions in favor of advancing her male colleagues, which she alleged was retaliation for rebuffing his romantic advances. She further alleged that he took credit for a fund she had helped raise for German investors – his name appears with one other Wafra colleague on the vehicle’s filing with the Securities and Exchange Commission. Kraut’s subsequent lack of origination credit or fee denied her “significant financial equity,” she claimed.
Management demoted her responsibilities and marginalized her from projects and investments, the complaint said
Kraut reported the harassment and discrimination to Wafra in April. Yvonne Compitello was named as head of real estate, per the firm’s website, after Lively was fired.
A Wafra spokesman declined to clarify if Compitello is the interim or permanent head of real estate.
Compitello – Lively’s “close personal friend” – and other Wafra executives have subsequently retaliated against Kraut, per the complaint. Management demoted her responsibilities and marginalized her from projects and investments, withholding information relating to what would normally be part of her work.
The Wafra spokesman declined to comment on the allegations of retaliation. Kraut remains employed at Wafra.
Kraut’s complaint with the EEOC begins a process that could involve voluntary mediation or settlement, according to the EEOC’s website. An EEOC investigator evaluates the complaint and conducts a firm investigation to make a recommendation if there is cause to believe that unlawful discrimination occurred. If that is the case, the parties can resolve the charge through a process called conciliation. If unsuccessful, the EEOC can file a lawsuit in federal court, but if the EEOC does not litigate, the plaintiff receives the right to sue.
Her complaint named both Lively and Wafra as defendants.
Multiple women executives in the US private real estate market told PERE they have not seen other EEOC cases within the sector.
In one other case, a former Fidelity Investments real estate analyst, who worked at since-spun off Long Wharf Capital, settled a gender bias case in 2011 for $300,000. She filed a lawsuit last year alleging Fidelity violated her settlement by giving her negative references in retaliation for reporting gender discrimination. The case remains open, according to court records.
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