InsightsKAP’s insights on private equity investor relations and fundraising
Grosvenor closes $700M secondaries fund; Brookfield explores acquiring Forest City; Starwood plans to exit Canadian Westins
Brookfield is in talks to buy Forest City Realty. Brookfield is exploring acquiring Forest City, which has been considering opportunities to increase shareholder value after being targeted by activist investor Land & Buildings Investment Management.
A new direction for Harvard. Since joining Harvard in November 2016, CIO Narv Narvekar has led major changes in the endowment’s strategy based on his belief that Harvard’s previous approach over-emphasized individual asset class benchmarks. Under the new model, each investment team member focuses on the performance of the overall endowment.
CAPITAL RAISING UPDATES
Blackstone holds $2 billion initial close for European fund. Blackstone Property Partners Europe is a core-plus real estate fund that will invest in properties throughout Europe. It is the first European open-ended, core-plus fund for the firm. According to the fourth quarter and full year results, Blackstone’s global real estate platform realized $24.5 billion, deployed $19.9 billion and achieved $23.8 billion of total AUM inflows in 2017.
GCM Grosvenor closes Secondary Opportunities Fund II. GSF II will acquire interests in private funds oriented toward small and middle-market buyout, special situation, growth equity, infrastructure and real estate strategies with a focus on transactions of less than $50 million average deal size. The fund reached its hard cap with $700 million in committed capital.
JLL has appointed Mark Zettl President of Property Management, Americas. In this role, Zettl will oversee all office property management initiatives across the platform’s 356 million-square-foot portfolio. Mr. Zettl most recently served as COO for Waterton’s portfolio of residential and hospitality properties. Prior to Waterton, he served as an executive vice president for Ultima Hospitality. Previously, he was vice president of operations for two Chicago-based hotel companies.
Starwood Capital Group is selling Westin Hotel portfolio in Canada. Starwood is selling its Westin-branded hotels in Ottawa, Calgary and Edmonton in a deal that may be valued as high as $525 million. Cushman & Wakefield is handling the sale of what is being branded as the Westin Hotels Portfolio Canada, but the properties may be sold individually. Marriott International, which now owns Starwood Hotels and Resorts, is the operator at all hotels and no changes to the names of the hotels are expected.
“These are three great hotels in great cities. We will sell them together, or we will sell them individually.” – Curtis Gallager, Vice President of Hotel Investments, Starwood
Great-West Life Realty Advisors acquires EverWest Real Estate Partners. Great-West Life Realty Advisors (GWLRA) has acquired EverWest Real Estate Partners, a privately held real estate investment management and operating company headquartered in Denver. EverWest currently manages a portfolio of office, industrial and multi-residential assets across the U.S. The acquisition is a strategic move by GWLRA to establish a global investment platform to serve its investor clients.
“The acquisition of EverWest provides us with a real estate platform in the U.S. and opens up investment opportunities for our clients.” – Paul Finkbeiner, President, GWL Realty Advisors.
Taconic Investment Partners and Clarion Partners form JV to pursue affordable housing in N.Y. Taconic, an owner, operator and developer of commercial and residential real estate, has formed a joint venture with Clarion, a leading real estate investment manager, to pursue the acquisition and renovation of affordable-housing properties in New York City. The new venture, Quality Communities, has already closed on its first investment, a five-property portfolio in the Bronx. The partnership intends to invest up to $400 million in the venture.
LIMITED PARTNER NEWS
San Diego County Employees Retirement Fund (SDCERA) has committed $100 million to Brookfield Senior Mezzanine Real Estate Finance Fund. The fund launched in 2017 and will invest in debt secured by properties in strategic locations across the U.S. SDCERA manages $12.4 billion of assets and maintains a 9% allocation to real estate.
Boston City Retirement System is looking for managers to run a $70 to $80 million real estate mandate. The goal is to identify a diversified, non-core, closed-end fund as well as a low-cost, core, open-end fund to complement the existing real estate commitments. Boston’s consultant, NEPC, is assisting with the search (RFP available here.) The $4.7 billion defined benefit plan currently allocates 9.2% of assets to real estate, slightly below their 10% target.
New Jersey State Investment Council has hired Hamilton Lane as its real estate consultant. The contract becomes effective February 1, 2018 and is valid for five years. RVK was the fund’s previous real estate consultant.
Oregon State Treasury has terminated a real estate separate account managed by Talmage. According to Preqin, the $430 million separate account invested solely in real estate debt; Oregon has shifted its focus toward equity. The $82.3 billion public pension currently allocates 9.2% of its assets to real estate, below its 12.5% target.
Massachusetts Pension Reserves Investment Management Board (MassPRIM) will be committing $920 million to real estate. The capital will be committed across six different separate accounts managed by Invesco Real Estate, Lasalle Investment Management, JP Morgan Asset Management and AEW Capital management (who will manage a second separate account on a provisional basis while MassPRIM seeks a permanent manager for this account). The sixth separate account will be managed by the public pension fund’s in-house investment team. The $70 billion public pension fund also expects to sell off $583 million worth of real estate assets. MassPRIM is an active investor in real estate and currently allocates 8.65% of its total assets to real estate, below its 10% target.
Regents of the University of California (UC Regents) will be investing in real estate in a variety of regions around the world over the next 12 months. The pension intends to commit between $350 and $500 million across three to four private real estate funds. The $114.9 billion public pension fund currently allocates 3% of assets to real estate, below is 7% target.