2010AWARDS & AnnuAL REVIEW - PERE

MAR 2011 | perenews.com
FOR THE WORLD’S PRIVATE REAL ESTATE MARKETS
2010
AWARDS &
AnnuAL REVIEW

A long
history of
generating
growth
2011 marks Rockspring’s 27th year in
the property investment business. Today,
we’re a fully independent professional
investment fiduciary – 100% owned by
our partners and employees – with over
€7.4 billion in funds under management.
With investments located in the UK and
12 other European countries, we have a
diverse client base that includes single-
client accounts and a series of tax-efficient,
commingled investment funds.
www.rockspringpim.com

Senior Editor, Real Estate
Erik Kolb +1 646 380 6194, erik.k@peimedia.com
Editor, PERE
Robin Marriott +44 20 7566 5452, robin.m@peimedia.com
Editor, PERENews.com
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On the road
to recovery
Welcome to PERE’s first annual Awards &
Annual Review issue. While this is not the
first time we have had an annual review
issue nor is it the first time we have published
an awards issue, this is the first time
we have joined the two efforts together in
one publication. Much like the industry we
cover, we are consolidating as well.
When you think about it, having one publication
for both special features makes a lot
of sense. Our annual review used to come
out with the December issue, which meant that any industry events
that happened after the US Thanksgiving holiday did not make it
into the review issue. For 2010, that would have meant missing out
on several big news items, including the fact that CBRE Investors
was likely to acquire ING REIM (which it officially did this year).
With regards to awards, our coverage of the winners used to be
just a special section in the March issue. Now, we have more room
to really give our awards the full effort they deserve (not that we
ever gave anything less) and leverage off of the wealth of content
from our annual review.
First up in the new Awards & Annual Review issue are the results
of the 2010 Global PERE Awards, where we provide a brief look at
the people, firms and deals that the industry deemed the best of the
best in 2010. Divided into our three coverage regions as well as a
global section, these awards garnered thousands of votes from the
readers of PERE and PERENews.com around the world. Check out
the complete list of winners on p. 6 and mini profiles of those winners
starting on p. 8.
Then, dive into the Annual Review as we look back at the key
issues of 2010: the rush to core assets, the shift in power from GPs
back to LPs and the shakeout among investment managers and
private real estate firms, to name a few. We also revisit our various
PERE Roundtables, re-examine some of the best Blueprint interviews
we conducted in 2010 and take you on a pictorial tour of our
four PERE Forums. Most importantly, we chronicle the year’s top
stories from the Americas, Europe and Asia and kick it all off with a
global preview of private equity real estate for 2011 on p. 26.
Reading back through the pages of this publication, it is clear
that the private equity real estate industry was on its way to recovery
in 2010. And if the momentum from the end of last year carries
through to the rest of 2011 – as it has in the first couple of months
so far – this year could be a true turning point for the private real
estate industry.
Enjoy the review,
Erik Kolb
Senior Editor, Real Estate
PERE and PERENews.com
erik.k@peimedia.com
editor’s letter
2010 AwArds & AnnuAl review | PERE 1

InDEx
4 The 2010 Global PERE Awards
The votes have been counted. Find out which people, firms and deals were named private
equity real estate’s best in 2010.
GLOBAL
26 Second half events auger 2011 trends
Strategic shifts and new developments in private equity real estate in the second half of 2010
offer clues to global trends for 2011. By Erik Kolb
28 Memories of 2010
Real estate professionals offered memorable advice about the industry in 2010. Here, we
remember the best of what some of them said
AMERICAS
30 America’s bifurcation
It was a tale of two countries in the US, with select markets and players focused on core
assets having it all and everyone else left to sort through the rubble. By Zoe Hughes
32 Rise of the LP
Excerpts from the best of PERE’s ‘Intellectual Property’ columns show the balance of power
shifting back to LPs and GPs struggling against the tide
34 A hostile environment
Excerpts from the 10 most-read stories for the Americas track major reunions and industry
trends amid tough conditions
EuROPE
40 The hunting party
Opportunity funds in Europe went ‘sharp shooting’ for investments in a hostile
environment. By Robin Marriott
42 A never-ending struggle
Excerpts from the best of PERE’s ‘Eurozone’ columns show GPs and LPs trying to reach an
understanding while battling it out over roles and fees
44 Building blocks
Excerpts from the 10 most-read stories for Europe track mergers, new businesses and a
plethora of hires
47 Political football
An excerpt from PERE’s UK roundtable in May found participants fearing the consequences
of a hung parliament, which is precisely what happened
ASIA
52 Changing of the guard
As investment banks back out of Asia’s private equity real estate sector, PERE considers
those primed to take their place. By Jonathan Brasse
54 Land of opportunity
Excerpts from the best of PERE’s ‘Asiaview’ columns show that opportunities abound for
investors throughout the region
56 Seoul searching
Excerpts from the 10 most-read stories for Asia show that Korea was a hotbed of activity, not
least due to the sheer volume of investment equity to emanate from the East Asian country
59 Inside ADIA
In an excerpt from one of our Blueprint interviews, PERE was given an all-access tour and
briefing on the evolving strategy of one of the world’s most capital-rich property investors
DATA
62 PERE 30
64 Capital Watch
2 PERE | 2010 AwArds & AnnuAl review
4
36
38
48
49
60

OWNERS
OPERATORS &
INVESTORS IN
REAL
ASSETS
Brookfi eld
GLOBAL DEAL OF THE YEAR
The recapitalization of
bankrupt General Growth
Properties by a consortium
led by Brookfield Asset
Management
NORTH AMERICA
DEAL OF THE YEAR
The recapitalization of
bankrupt General Growth
Properties by a consortium
led by Brookfield Asset
Management
GLOBAL DEAL OF THE YEAR
NORTH AMERICA DEAL OF THE YEAR
A recognized industry leader with more than US$120 billion
in assets under management and 100 years of experience
owning, operating and investing in real assets.
Our global operations provide unparalleled access
to industry intelligence, deal fl ow and investment
opportunities.
As a preferred investment partner with a proven track
record of creating value, we have established a series
of private funds and investment programs on behalf of
institutional clients, representing commitments of over
US$23 billion. We are also a major investor in our
funds, ensuring that our interests are clearly aligned
with those of our clients.
www.brookfi eld.com
N E W Y O R K • T O R O N T O • L O N D O N • S Y D N E Y • M U M B A I • H O N G K O N G • S Ã O PA U L O • A B U D H A B I

last year was a year of transition, as many
firms and individuals struggled to adjust
to the new realities of the global real
estate markets. it was enough to make
even some of the biggest players in the
industry throw up their hands in defeat.
Yet, for those with savvy and discipline,
2010 proved to be a year of opportunity.
so, which firms, individuals and deals
stood out from the crowd in 2010?
in an attempt to answer that question, we
solicited nominations from the readers of
PERE and Perenews.com and then had
them vote on a slate of five finalists. And
vote they did, in the thousands.
if there was one trend to emerge from
this year’s voting, it was that the industry is
starting to see a changing of the guard.
Although several industry stalwarts
managed to win awards again this year,
the races were much closer than in years
passed and the competition was coming
from new upstarts and the next wave of
private real estate investors.
so, without further ado, we present the
results of the 2010 Global Pere Awards,
along with mini profiles on the winning
firms and individuals.

GLOBAL pg. 8
GLOBAL INDUSTRY FIGURE OF THE YEAR
Barry sternlicht, starwood Capital Group
GLOBAL FIRM OF THE YEAR
the Blackstone Group
GLOBAL DEAL OF THE YEAR
General Growth Properties’ recapitalisation by
a Brookfield Asset Management-led consortium
nORTH AMERICA pg. 12
NORTH AMERICA INDUSTRY FIGURE OF THE YEAR
Barry sternlicht, starwood Capital Group
NORTH AMERICA FIRM OF THE YEAR
starwood Capital Group
NORTH AMERICA DEAL OF THE YEAR
General Growth Properties’ recapitalisation by
a Brookfield Asset Management-led consortium
NORTH AMERICA LP OF THE YEAR
teachers retirement system of texas
NORTH AMERICA FUNDRAISE OF THE YEAR
Angelo, Gordon & Co and Ge Capital real
estate, $1.25 billion legacy securities Public-
Private investment Fund
EuROPE pg. 16
EUROPE INDUSTRY FIGURE OF THE YEAR
robert Hodges, the Carlyle Group
EUROPE FIRM OF THE YEAR
rockspring Property investment Managers
EUROPE DEAL OF THE YEAR
MGPA’s purchase and leaseback of Aldi
supermarkets in Germany
EUROPE LP OF THE YEAR
norway Government Pension Fund Global
EUROPE FUNDRAISE OF THE YEAR
rockspring Property investment Managers,
£336 million rockspring uK value Fund
6 PERE | 2010 AwArds & AnnuAl review
MIDDLE EAST, NORTH AFRICA FIRM OF THE YEAR
Qatar investment Authority
LATIN AMERICA FIRM OF THE YEAR
Hines
NORTH AMERICA PLACEMENT AGENT OF THE YEAR
Credit suisse real estate Private Fund Group
NORTH AMERICA FUND OF FUNDS FIRM OF THE YEAR
Morgan stanley Alternative investment Partners
NORTH AMERICA DEBT PROVIDER OF THE YEAR
JPMorgan
NORTH AMERICA LAW FIRM OF THE YEAR
(FUND FORMATION)
Goodwin Procter
NORTH AMERICA LAW FIRM OF THE YEAR
(TRANSACTIONS)
Kirkland & ellis
EUROPE PLACEMENT AGENT OF THE YEAR
Credit suisse real estate Private Fund Group
EUROPE FUND OF FUNDS FIRM OF THE YEAR
Aviva investors
EUROPE DEBT PROVIDER OF THE YEAR
eurohypo
EUROPE LAW FIRM OF THE YEAR (FUND FORMATION)
Clifford Chance
EUROPE LAW FIRM OF THE YEAR (TRANSACTIONS)
Clifford Chance

ASIA pg. 21
ASIA INDUSTRY FIGURE OF THE YEAR
Collin lau, China investment Corporation
ASIA FIRM OF THE YEAR
Harvest Capital Partners
ASIA DEAL OF THE YEAR
the Blackstone Group’s takeover of Bank
of America Merrill lynch’s Asia real estate
Principal investments platform
ASIA LP OF THE YEAR
China investment Corporation
ASIA FUNDRAISE OF THE YEAR
Fortress investment Group,
$800 million Fortress Japan opportunity Fund
ASIA PLACEMENT AGENT OF THE YEAR
Citi Private Bank
ASIA FUND OF FUNDS FIRM OF THE YEAR
CBre investors
ASIA DEBT PROVIDER OF THE YEAR
HsBC
ASIA LAW FIRM OF THE YEAR (FUND FORMATION)
Clifford Chance
ASIA LAW FIRM OF THE YEAR (TRANSACTIONS)
Baker & McKenzie
The opening of our New York office in January 2011,
and the closings of three investments totaling approximately
$100 million in the second half of 2010.
$56 million
fund-level credit facility
for a prominent
Northeast oriented
real estate fund
SAN FRANSISCO
One Bush Street, 12th Floor
San Francisco, CA 94104
415.318.7980
Clairvue Capital Partners is pleased to announce
one opening and three closings:
$18 million
preferred equity
investment in a
national multi-family
housing platform
www.clairvuecapital.com
$25 million
preferred equity
investment in a
non-traded shopping
center REIT
NEW YORK
380 Lexington Avenue, Suite 710
New York, NY 10168
212.632.6921

GLOBAL
INDUSTRY FIGURE OF THE YEAR
1. Barry Sternlicht, Starwood Capital Group
2. Andie Kang, national Pension service of Korea
3. Collin lau, China investment Corporation
“A good crisis is a terrible thing to waste,” Barry Sternlicht recently
told a real estate conference. And when it comes to 2010,
the founder of Starwood Capital Group can’t be accused of wasting
opportunities that came his way. Investing several billion
dollars of equity, his firm was a big player in distressed loans and
assets, particularly in the US. However, it was Sternlicht’s international
ambitions that were of note during 2010, not least due
to the fact they will set the stage for the firm’s deal flow in 2011.
Brazil, of course, was one highlight for Sternlicht after the firm
opened an office in São Paulo, led by the founders of Sollers Investimentos,
Rodolfo and Vitor Senra, and Starwood’s acquisitions
professional Ryan Hawley. With a booming middle class,
demand for real estate in the country is rising with Starwood
expected to source deals alongside local partners across all real
estate sectors, as well as make entity-level investments in real estate
operating firms.
Europe also is expected to become a bigger part of Starwood’s
deal flow this year, with Sternlicht eagerly eyeing the region’s
banking system for more transactions. The chief executive officer
said he remained “calm” about European deals in 2010, but
GLOBAL
FIRM OF THE YEAR
1. The Blackstone Group
2. starwood Capital Group
3. lasalle investment Management
During a call on its third quarter results in October, The Blackstone
Group’s illustrious leader Steve Schwarzman declared of
the private equity real estate sector: “There will be a huge shakeout.”
So convinced of being the biggest player standing when the
dust finally settles following the financial crisis, the New York
firm already has revealed it wants to raise a whopping $10 billion
for its next global real estate opportunity fund. Despite the
widely accepted notion that the raising of mega funds – the likes
of which were last seen from 2006 through 2008 – is largely over,
few doubt Blackstone will do it. And why not? After all, while others
struggle to achieve respectable targets, Blackstone’s real estate
operation presented impressive figures for 2010, with its portfolio
increasing in value by 69 percent. As bottoms were hit in many of
Blackstone’s major markets, the firm really ramped up its investment
activities, investing $6.5 billion globally in 2010, according
to Real Capital Analytics. That is more than anyone else.
The common thread between most of Blackstone’s real estate
investments in 2010 was that they were truly opportunistic – situations
where the firm could capitalise on distressed or troubled
positions. Standout transactions included its participation in the
8 PERE | 2010 AwArds & AnnuAl review
he sees more exciting opportunities
in the near fu- Sternlicht: agnostic internationalism
ture as the financial sector
starts actively dealing with its legacy loan portfolios.
However, what is perhaps most interesting in Sternlicht’s success
in clinching the title of Global Industry Figure of the Year for
the second year running is that his nearest rivals hail from parts
of Asia where Starwood is not expected to tread anytime soon.
Despite many of Starwood’s rivals wanting to break into the Chinese
market, Sternlicht has remained cool about the country’s
real estate prospects, not least owing to the fact rules and regulations
can change – sometimes overnight – and that real estate
supply can alter dramatically as government bodies authorise
massive developments. Instead, he kept much of his Asia attention
in 2010 on India, where the firm has maintained its presence
and where Starwood is hoping to expand its investments.
For Sternlicht, there is a secret to the firm’s success in international
investing. “I think it’s being agnostic,” he explained to
a recent gathering of real estate executives. “There is no emotion
when investing abroad.”
$6.8 billion recapitalisation of General Growth Properties, helping
to take the stricken US shopping centre business out of Chapter
11 protection; the hotel chain Extended Stay, which it helped
remove from creditors’ protection via a $3.9 billion investment
with partners just three years after selling it for $8 billion; and
the purchase of 180 logistics properties from ProLogis at a time
when the Denver-based business needed to offload assets to meet
its debt obligations.
2010 also will be remembered as the year Blackstone finally cemented
its place in Asia. Initially reluctant to absorb the Asia real
estate principal investments platform of Bank of America Merrill
Lynch until its litigation issues were settled, Blackstone finally
took the 60-person business over once the LPs of its $2.65 billion
Asian Real Estate Opportunities Fund had received a handsome
settlement to quell their disquiet in November. Subsequently, the
firm now has large asset management capabilities to add to its
investment executives at its offices in Hong Kong, Shanghai, Tokyo
and Mumbai. Naturally, the episode was another example
of capitalising on a distressed situation and further underscored
why it was voted Global Firm of the Year.

GE Capital
Real Estate
PPIP works for
investors
GE Capital Real Estate and Angelo, Gordon & Co. are grateful to the
industry for recognizing our $5 billion Public-Private Investment Fund
with PERE’s 2010 North America Fundraise of the Year Award.
For GE Capital Real Estate, our participation in PPIP is part of a
comprehensive strategy to deploy our real estate skills for investors
around the world. Look for more from us.
gecapitalrealestate.com/invest
imagination at work

GLOBAL
When it comes to deals, you can’t get much larger, or more complex,
than General Growth Properties (GGP). When the US
REIT filed for bankruptcy protection on 16 April 2009, it was
heralded by some as a “once in a lifetime” buying opportunity
for rivals. The largest real estate-related Chapter 11 filing in US
history, GGP took with it approximately 158 cash-flowing regional
shopping centres. However, when GGP filed for bankruptcy
protection there was one firm already out of the starting
blocks: Brookfield Asset Management.
With a total debt load of more than $27 billion, roughly $4 billion
of it due in the 12 months following the failure of Lehman
Brothers, GGP was struggling to calm panicked markets and its
creditors and fend off circling hedge funds. As a result, Brookfield
was negotiating with GGP about providing rescue financing.
Once GGP filed for Chapter 11, though, the REIT was put
into open play for all real estate investors, not just Brookfield.
MIDDLE EAST, nORTH AFRICA FIRM OF THE YEAR LATIn AMERICA
1. Qatar Investment Authority
2. Kuwait investment Authority
3. Mubadala
DEAL OF THE YEAR
1. General Growth Properties’ recapitalisation by a Brookfield Asset
Management-led consortium
2. Apollo Global real estate’s takeover of Citi Property investors’ platform and funds
3. the Blackstone Group’s takeover of Bank of America Merrill lynch Asia real estate Principal
investments platform
As with most sovereign wealth funds, real
estate has become an attractive diversifier
for the Qatar Investment Authority. Like
other investors of its magnitude, Qatar
forwent making commingled fund investments,
opting instead to make direct investments
in assets via its various entities,
including Qatari Diar, The First Investor
and Qatar Holdings.
That’s not to say Qatar wanted nothing
to do with commingled funds. In May, The First Investor,
which is controlled by Qatari Diar, launched opportunity
funds targeting Brazil and Russia, aiming to raise a combined
$1 billion.
Still, Qatar’s major headlines derived from its direct investments
in London. On top of its 24 percent stake in developer
Songbird Estates, Qatar also was behind a joint investment
in the development of the “Walkie Talkie Tower” at 20 Fenchurch
Street. Add to that the trophy purchase of landmark
Harrods department store in Knightsbridge in a deal valued
at more than $2 billion, and 2010 was quite the acquisitive
year for the Middle East, North Africa Firm of the Year.
10 PERE | 2010 AwArds & AnnuAl review
Harrods: Qatar’s
London trophy
In total, 131 firms expressed an interest in GGP, with 18 parties
eventually signing confidentiality agreements. But the most intense
competition Brookfield faced was from rival REIT Simon
Property Group, which engaged in an extremely public battle to
take over GGP in its entirety. As each side corralled equity partners
and creditor support, Brookfield and its consortium of investors,
including Bill Ackman’s Pershing Square and Fairholme
Capital Partners, edged into the lead, ultimately being named
the stalking horse bidder in May 2010.
That success, however, wasn’t the end of things for Brookfield.
Simon may have withdrawn from the race, but as Brookfield
faced the GGP auction it knew it had to cement its position. Securing
equity commitments from the Teachers Retirement System
of Texas and The Blackstone Group, Brookfield transformed
what had been a solo recap deal into an $8 billion equity infusion
by some of the largest real estate investors in the world.
1. Hines
2. AMB Capital Partners
3. equity international
FIRM OF THE YEAR
Hines is no newcomer to the Latin
America market. Indeed, you
could argue Hines is the granddaddy
of Latin American investing,
closing its first Mexico deals
EcoLogistics, Mexico:
institutional industry
in the early 1980s before expanding into Brazil in 1998. Today,
Brazil is one country firmly in Hines’ vision as it becomes an
increasingly attractive destination for LPs, as well as other
fund managers.
Part of Hines’ focus follows the close in September of the
firm’s third separate account with the California Public Employees’
Retirement System, which raised $190 million of equity
and is now fully invested. That mandate targeted primarily
logistic, office and affordable residential in Brazil.
In 2010, though, it was the firm’s industrial activities across
the whole Latin American region that really shone through.
Hines executed 14 industrial leases in Brazil totaling more
than 2.4 million square feet of space and accounting for more
than half of all Class A warehouse leases in the country. Meanwhile,
in Mexico, the firm’s 258,000-square-foot EcoLogistics
industrial property in San Luis Potosi became the first industrial
building to achieve LEED certification in Mexico.

Leading the way through local expertise.
Brandenburg Gate, Berlin | Big Ben, London | Statue of Liberty, New York | Eiffel Tower, Paris
Every real estate market is different.
As an internationally experienced specialist bank,
we are leading the way in finding a route through
the labyrinth of commercial real estate financing
from start to finish. With local presence and regional
expertise, we develop intelligent solutions – in
all of our ten international markets. Solutions
that obviously meet our clients’ expectations and
earned us the 2010 PERE Award.
www.eurohypo.com
a passion for solutions.
gürtlerbachmann

nORTH AMERICA
INDUSTRY FIGURE
OF THE YEAR
1. Barry Sternlicht,
Starwood Capital Group
2. Jon Gray,
the Blackstone Group
3. Mike Fascitelli,
vornado realty trust
Barry Sternlicht may have led Starwood
Capital Group in investing billions of
dollars in pools of troubled loans and distressed properties
last year, but the founder of the Greenwich, Connecticut firm
was still cautious when it came to the asset class in 2010.
Amid uncertainty over US economic growth and future
growth in the real estate sector, Sternlicht was quick to warn
against the concerted push for core assets in prime markets
last year. With cap rates for some deals plunging below the 5
percent mark, he questioned how investors were underwriting
such transactions. “It’s a little like 2007, when cap rates were
plunging but cash flows weren’t rising,” he told PERE, adding
that caution would be needed when investing in 2011 and 2012.
Despite the circumspection, 2010 was still a great year to
be investing in real estate in the US. For Starwood, troubled
loans, including mortgage portfolios from regional banks,
were among the firm’s key acquisitions, with one highlight
being the October purchase of the mortgage for the Viceroy
hotel resort on the Caribbean island of Anguilla. Purchased
for $122 million, Starwood snapped up the loan after lender
Citigroup cut its losses. With an original face value of $380
million, the deal is just one example of why Sternlicht has
been named North America Industry Figure of the Year.
nORTH AMERICA
DEAL OF THE YEAR
Sternlicht: great time
for cautious investing
When it comes to US deals in 2010, you can’t get much bigger
than General Growth Properties (GGP). Nineteen months after
first filing for bankruptcy protection, the troubled REIT finally
emerged from Chapter 11 in November, thanks to an $8 billion
recapitalisation led by Brookfield Asset Management and the restructuring
of $15 billion of its debt.
For the Toronto-based fund manager, the deal was notable not
just for its size but also owing to the fact much of the equity came
from Brookfield’s $5.5 billion Real Estate Turnaround Consortium.
The club fund originally was closed in 2009 with pledges
from a handful of institutional investors and sovereign wealth
funds interested in targeting distressed real estate deals in a large
nORTH AMERICA
FIRM OF THE YEAR
1. Starwood Capital Group
2. Brookfield Asset Management
3. the Blackstone Group
When it came to closing deals in 2010, there was no one
real estate sector that Starwood Capital Group preferred.
In fact, other than distressed, there are few other words to
describe the Greenwich, Connecticut firm’s playbook last
year. From pools of troubled mortgages to the acquisition
of foreclosed office properties, Starwood kept its mind open
when investing.
For many, though, Starwood’s affinity with the hospitality
sector shone through last year, despite making up just a
third of the firm’s activity. Armed with $2.8 billion of equity
from its latest global opportunity and hospitality vehicles,
Starwood was a presence in the sector.
Capital wasn’t just flowing from Starwood’s private funds,
though. The REIT, Starwood Property Trust, also was a
big originator and acquirer of hospitality debt, originating
a $138 million first mortgage for the reconstruction of the
Hyatt Regency in New Orleans, which closed down in 2005
following Hurricane Katrina.
Of course, Starwood’s attraction to hospitality wasn’t just
restricted to asset-level equity and debt deals. In 2010, the
firm was probably best known for its entity-level play for the
Extended Stay hotel chain. The firm ultimately lost out on
that deal, but that has done nothing to dampened Starwood’s
appetite for the sector. One of the firm’s first deals in 2011
was the acquisition of an office property in New York for $72
million with plans to turn it into a hotel.
1. General Growth Properties’ recapitalisation by a Brookfield Asset
Management-led consortium
2. extended stay Hotels acquisition by Centerbridge Partners, Paulson & Co and the Blackstone Group
3. the sale of the John Hancock tower by normandy real estate Partners and Five Mile Capital Partners
12 PERE | 2010 AwArds & AnnuAl review
vehicle, but without being confined to a traditional private equity
real estate structure. By investing $3 billion of the consortium’s
equity in GGP as well as a further $1.7 billion of capital from
Brookfield’s balance sheet and in shares, the firm now holds a 38
percent stake in the US mall operator, as well as a 14 percent interest
in the spinout of GGP’s development and non-core assets,
now known as The Howard Hughes Corporation.
For Brookfield, the GGP deal was not just an opportunistic
recapitalisation, it also was a means of helping the former bankrupt
entity grow in the future. Indeed, Brookfield recently revealed
it would help GGP’s core operations expand into Brazil,
Europe and Asia.

Proud winner of the
2010 PERE ‘Europe Deal of theYear’
for the acquisition of 140 properties from German retailer Aldi
MGPA is an independently managed private equity
real estate investment advisory company focused
on real estate investment in Europe and Asia.
Through our network of offices in Europe and Asia,
we manage approximately US$10 billion in assets.
Our longstanding local presence, combined with a
hands-on active asset management and development
capability, allows us to see and deliver value in real
estate where it might not be obvious to others.
For further information please visit www.mgpa.com
SeeingValue in Real Estate

nORTH AMERICA
FUNDRAISE OF THE YEAR
1. Angelo, Gordon & Co and GE Capital Real Estate, $1.25 billion Legacy Securities
Public-Private Investment Fund
2. starwood Capital Group, $1.8 billion starwood Global opportunity Fund viii and $925 million
starwood Capital Hospitality Fund ii
3. vornado realty trust, $550 million vornado Capital Partners i
When Angelo, Gordon & Co. and GE Capital Real Estate
launched their bid to raise money under the US government’s
Public Private Investment Program (PPIP) in 2009, they knew it
would be tough going. Not only was the market in the midst of
a fundraising freeze, but both firms had relatively new stories to
tell, with Angelo, Gordon’s residential mortgage-backed securities
(RMBS) team having joined the firm in 2008 and GE Capital
Real Estate only having made the decision to expand into thirdparty
investment management that same year.
And yet, despite the challenges facing the firms, Angelo, Gordon
and GE succeeded in raising the largest PPIP fund of all,
nORTH AMERICA
LP OF THE YEAR
1. Teachers’ Retirement System of Texas
2. Canada Pension Plan investment Board
3. California Public employees’ retirement
system
When it comes to activity in 2010, it’s not just how much a
limited partner commits to new strategies that is important
but also how much is called from their existing deals. After
seeing capital calls figuratively drop off a cliff in late 2008 and
early 2009, LPs are now starting to see fund managers spend
their dry powder as transactions begin to flow.
However, for the Teachers’ Retirement System of Texas, the
volume of capital calls in 2010 wasn’t just a slight improvement
over 2009 levels – it more than doubled. After seeing roughly
$2 billion of equity called by its GPs in 2009, the $100 billion
public pension saw a further $5 billion of capital called in 2010,
giving Texas Teachers a major investment boost in what could
prove to be some of the best vintage years of the downturn.
Of course, 2010 wasn’t just about capital calls for the Austin-based
plan; Texas Teachers also allocated $4 billion of equity
to new real asset investments, with much of the capital
going to real estate. Among the most notable deals was the
pension’s $500 million investment in the recapitalisation of
General Growth Properties in July. The pension also made a
variety of commitments to single LP core funds investing in
the office space.
With a $9.3 billion portfolio, including $7.3 billion of private
real estate, Texas Teachers’ real asset team is by no means
US centric. In 2010, the pension also committed to three international
vehicles with plans to commit to another Asia vehicle,
as well as its first Brazil fund, in 2011.
14 PERE | 2010 AwArds & AnnuAl review
corralling $1.25 billion of equity from 175 investors and topping
their target of $1.1 billion. Backed by a government equity match
and leverage, the vehicle, which is almost 90 percent invested
today, has total firepower of around $5 billion.
Focused on legacy securities originated before 2009 with a
triple-A rating at origination, the two fund managers adopted
a different strategy by investing more of the vehicle in CMBS.
With RMBS and CMBS investments each believed to represent
50 percent of the portfolio, PPIP fund benefitted from a dramatic
narrowing of CMBS spreads between 2009 and 2010, bolstering
returns to investors – and, of course, the taxpayer.
nORTH AMERICA
PLACEMENT AGENT
OF THE YEAR
1. Credit Suisse Real Estate Private Fund
Group
2. Greenhill real estate Capital Advisory Group
3. Park Hill real estate Group
When it comes to describing 2010 for Credit Suisse Real
Estate Private Fund Group (REPFG), the phrase annus horribilis
initially springs to mind. Faced with one of the toughest
fundraising environments ever seen in private equity
real estate, the placement team also suffered the departure
of up to 12 senior members of its group – a situation that
prompted its merger within the wider Credit Suisse Private
Fund Group. It even left some pondering whether the real
estate group was still in business.
However, not only was the New York-based group still
in business, it closed one of the biggest real estate secondaries
sales seen in years. Representing Harvard Management
Company, REPFG reportedly helped the endowment
offload partial interests in its $5 billion property portfolio,
which included more than 40 fund positions. Led by global
head Anthony Carpenito, REPFG also is believed to have
helped CrossHarbor Capital Partners reach a first close on
its Institutional Partners II vehicle, as well as corral equity
for Angelo, Gordon & Co’s $550 million AG Net Lease Realty
Fund II, according to SEC filings.
Recent filings show that REPFG also is raising Angelo,
Gordon’s $1.5 billion AG Core Plus Realty Fund III, as well
as its $2 billion opportunistic AG Realty Fund VIII vehicle
– sure signs that there’s plenty of life in REPFG for 2011 and
beyond.

nORTH AMERICA
FUND OF FUNDS FIRM
OF THE YEAR
1. Morgan Stanley Alternative
Investment Partners
2. Madison international
3. landmark Partners
Fundraising in 2010 was tough by anyone’s
standards, but for fund of funds and
secondaries vehicles the landscape was
even rockier last year. Out of more than
$24 billion of value-added and opportu-
nistic capital raised in 2010, just a couple of real estate secondaries
fund closed globally and Morgan Stanley’s Phoenix
Global Real Estate Secondaries fund was one of them.
With just nine investors, the $370 million Phoenix fund
almost resembles a club format within a traditional private
equity real estate structure. However, in terms of strategy, the
fund can be a little less traditional, having the ability to make
co-investment deals alongside GPs and other LPs in deals.
The primary focus of the vehicle, though, is in acquiring partial
and full secondaries interests in global property vehicles
with capital commitments of between $400 million and $800
million, or 10 to 20 properties. Led by chief investment officer
Joseph Stecher, Morgan Stanley AIP’s real estate group has
invested roughly a third of the Phoenix fund to date.
nORTH AMERICA
1. Goodwin Procter
2. Clifford Chance
3. Haynes & Boone
LAW FIRM OF THE YEAR
(FUND FORMATION)
Stecher: defying
the odds
For the fourth year in a row, Goodwin Procter has been
crowned North America Law Firm of the Year for fund formation.
Led by Robert Insolia in New York and David Watson
in Boston, the firm’s Real Estate Fund Formation Practice
advised on more than 35 real estate fund closings in 2010
with an aggregate of more than $7 billion in capital raised.
Notable examples of American fund assignments included
representing Beacon Capital in the final closing of its $2.5
billion office property fund. Goodwin Procter also advised
on final closings for two vehicles sponsored by Cornerstone
Real Estate Advisors, the $750 million Cornerstone Core
Mortgage Fund I and a $500 million separate account called
Cornerstone Core Mortgage Venture I.
And it looks like Goodwin Procter will be going for win
number five in 2011, as marketing activity is underway
for more than 20 funds for which the firm represents the
sponsor. Those funds are targeting an aggregate of nearly
$8 billion.
nORTH AMERICA
1. JPMorgan
2. wells Fargo
LAW FIRM OF THE YEAR
(TRANSACTIONS)
1. Kirkland & Ellis
2. Paul, Hastings, Janofsky & walker
3. Greenberg traurig
This time, the glory is all theirs. After sharing the 2009 title
of North America Law Firm of the Year for transactions with
Clifford Chance, Kirkland & Ellis proved its recognition was
no fluke with an even stronger performance in 2010. Overall,
the firm advised on more than $40 billion in transaction in
2010 and saw an overall increase in activity over 2009, when
the mammoth GGP deal accounted for much of its volume.
Led by Stephen Tomlinson in New York, Kirkland & Ellis
was in the thick of some of 2010’s biggest deals. The firm
advised Brookfield Asset Management on the creation of
separate accounts for investors in its global Real Estate Turnaround
Consortium club fund, whose investment in General
Growth Properties was named Global Deal of the Year as well
as for North America. Kirkland & Ellis also advised Archstone
Smith Trust – the REIT jointly owned by the Lehman
Brothers estate, Bank of America and Barclays – on the conversion
of $5 billion of bank debt into preferred equity.
In other deals, Kirkland & Ellis represented Walton Street
Capital on the sale of a 40 percent interest in the Houston
Galleria mall, which valued the property at $1.5 billion. The
law firm also advised Starwood Capital Group on two transactions:
its acquisition of a 49.9 percent stake in Hersha Hospitality
and its purchase of the Sea Island Company, a historic
golf resort located off the southern coast of Georgia. Through
bankruptcy auction, Starwood acquired Sea Island at a 60%
discount to the $533 million par value of the mortgage and a
further discount to the equity, which was wiped out.
nORTH AMERICA
DEBT PROVIDER OF THE YEAR
3. Federal deposit insurance Corp
JPMorgan’s Real Estate & Lodging Investment Banking
group provides advisory and capital market solutions to
the world’s most significant real estate, gaming and lodging
companies, as well as select private real estate owners, developers
and investors.
In June, JPMorgan came to market with a roughly $716
million CMBS deal, which at the time was the largest of
five such deals completed since the financial crisis and just
the second one of 2010. That deal was backed by 36 loans
secured by 96 commercial properties. The bank returned to
the CMBS market in October to top itself with a $1.1 billion
securitization backed by 30 loans for 47 properties.
2010 AwArds & AnnuAl review | PERE 15

EuROPE
INDUSTRY FIGURE OF THE YEAR
1. Robert Hodges, The Carlyle Group
2. Pete reilly, JP Morgan Asset Management
3. Mark Burton, independent advisor
Robert Hodges likely caught the eye of voters for leading The
Carlyle Group in a diverse set of UK opportunistic transactions.
Among them was perhaps the most watched transaction
in the UK in recent times – the £671 million purchase of
six office assets in London.
The portfolio Carlyle purchased formed part of the former
‘White Tower’ portfolio, which made headlines in 2009 as one
of the UK’s standout CMBS deals gone wrong. The investment
was made through the firm’s €2.2 billion Carlyle European
Real Estate Partners III fund and marked the Washington,
DC-based private equity firm’s return to the UK market.
However, The Carlyle Group did not stop there. Hodges
also led the firm in making its first investment in the UK residential
market with the £40m purchase of a development site
in London’s upmarket Chelsea area. Carlyle made the investment
through a joint venture with luxury residential developer
Athos Group, again on behalf of fund three. It followed
that deal up with its first strategic land investment, buying
an 80 percent stake in The Fairfield Partnership, which owns
several sites totaling more than 1,400 acres.
Lastly, Hodges took Carlyle into the British student accommodation
sector through a joint venture with Generation Estates.
The firm intends to grow the business so that eventually
it owns at least 4,000 beds in London, including the initial
pipeline of schemes. Carlyle may not always have had an easy
time of it in Europe, that’s for sure, but Hodges is helping the
firm to get back on track.
EuROPE
DEAL OF THE YEAR
MGPA’s deal to buy a portfolio of supermarkets in Germany
from retailer Aldi beat out headline-grabbing management-led
buyouts and corporate M&A to be named PERE’s Europe Deal
of the Year.
Voters backed MGPA for a number of reasons, including the
fact that it was one of the largest transactions in Germany in
2010. The so-called ‘Aldi South value-added portfolio’ comprised
approximately 140 different properties totaling more
than one million square feet in southern and western Germany.
It also was seen as a ‘first mover’ deal, with negotiations starting
in 2009 at a time when very few if any major retail value portfolios
were trading. Insurers Allianz and Generali subsequently
followed up with deals of their own.
FIRM OF THE YEAR
1. Rockspring Property
Investment
Managers
2. JPMorgan Asset
Management
3. the Carlyle Group
Perhaps tellingly, the award for Firm of the Year in Europe did
not go to a celebrated opportunity fund manager, but to an
established manager of lower-risk products. In keeping with
the mood among investors, Rockspring Property Investment
Managers traded off its reputation as a steady hand to help it
attract capital for separate accounts and commingled valueadded
funds. And there is no question that its stock has never
been higher in terms of global appeal.
The biggest success for Rockspring was winning not one
but two mandates from the National Pension Service of Korea
within the space of a year. Following a mandate to invest in
trophy offices in London in 2009, the firm was appointed on
a fully discretionary basis to invest $400 million in core assets
across Europe for the $300 billion sovereign wealth fund.
Rockspring said the capital awarded through the mandate,
when combined with leverage, would provide it with up to
$1 billion in spending power for investment in assets priced
between $65 million and $150 million.
Beyond individual mandates, there was conventional
fundraising as well. Rockspring managed to raise £336 million
($502 million; €408 million) in commitments for its UK
Value Fund, which has been named Fundraise of the Year for
Europe. Since then, it also has shown evidence of expanding
its footprint, recently opening an office in the Netherlands.
1. MGPA’s purchase and leaseback of Aldi supermarkets in Germany
2. Peakside Capital’s management-led buyout from Bank of America Merrill lynch
3. rockefeller Group’s acquisition of a majority interest in europa Capital
16 PERE | 2010 AwArds & AnnuAl review
EuROPE
Gilchrist: on a roll
The Aldi deal also is an interesting cross-breed transaction
with opportunistic and value-added components. Being a saleleaseback
on 15-year leases, the transaction offered long-term
secured income with a leading discount retailer, but the portfolio
also offered development angles, mainly for assets located in
Dusseldorf, Stuttgart and Nuremberg.
Furthermore, MGPA was able to buy the portfolio at what
one can argue was attractive pricing if one considers price per
square metre, initial yield, site values and secured discounted
rental income and the fact that it managed to secure financing
for the transaction at a loan-to-value ratio of 67 percent. And, in
a classic piece of opportunistic dealmaking, the firm believes the
capital markets may provide an exit in due course.

EuROPE
LP OF THE YEAR
1. norway Government Pension
Fund Global
2. APG
3. the uK Pension Protection Fund
Strictly speaking, the Norway Government Pension Fund
Global has not become a limited partner yet. However, when
one of the world’s largest sovereign wealth funds says it is
about to start investing in real estate and then begins doing
so in a big way, it must be worthy of recognition.
The first deal for the $524 billion fund, which is advised by
Norges Bank Investment Management, arrived in November
when it won a bidding competition to buy a 25 percent stake
in London’s Regent Street shopping district from The Crown
Estate for £448 million (€523 million; $719 million). The Norwegian
fund currently is looking for more large-ticket assets
in established western European markets such as the UK,
France and Germany that it can acquire mainly through club
deals and joint venture structures.
According to head of real estate Karsten Kallevig, the time
will come when it does consider investing in funds. “I am not
making a judgment call on opportunity funds, whether they
are good or bad,” he said in a recent interview with PERE.
“They can generate very good returns, and there are a lot of
very good people who, at some point, I would love to work
with. At this stage, however, we are just starting out building
a portfolio, and I just think that actively looking to invest in
opportunity funds is starting at the wrong end of the spectrum
right now.”
Still, the influence of the Norway Government Pension
Fund Global as a true LP will almost certainly grow once it
has built up a core portfolio of assets towards its overall investment
target of $26 billion.
EuROPE
PLACEMENT AGENT OF THE YEAR
1. Credit Suisse Real Estate Private Fund Group
2. Jones lang lasalle Corporate Finance
3. Cushman & wakefield Corporate Finance
When it comes to enticing LPs to part with their equity, 2010
will go down in the books as one of the hardest years in private
equity real estate history. With just $28 billion raised for valueadded
and opportunistic strategies, it’s notable that Credit Suisse
Real Estate Private Fund Group (REPFG) raised an estimated
$1.5 billion for its mandates in 2010, according to PERE data.
One trend that shone through in REPFG’s activities last year
was European appetite for core and core-plus strategies. Acting
as placement agent for ECE Projektmanagement’s European
Prime Shopping Centre Fund, REPFG helped the firm hold a
€490 million first close on the vehicle, which has a target of up
18 PERE | 2010 AwArds & AnnuAl review
EuROPE
FUNDRAISE OF THE YEAR
1. Rockspring Property Investment
Managers, £336 million Rockspring
uK Value Fund
2. Brockton Capital, £500 million Brockton
Capital Fund ii
3. eCe Projektmanagement, €380 million eCe
european Prime shopping Centre Fund
On paper, Rockspring Property Investment Managers was
not the favourite to garner the most votes in the Europe
Fundraise of the Year category. Instead, that was Brockton
Capital with its success in raising £500 million for Brockton
Capital Fund II. Nevertheless, the fellow London-based
firm won this battle with a £336 million ($502 million; €408
million) fundraising for
the Rockspring UK Value
Fund, which with bank
loans could amass up to
£700 million of property.
The fund’s strategy is to
focus on small- to medium-sized
assets primarily
in the office, retail and
industrial sectors, and the
goal is to deliver a net total
return to investors of 13
The Rockspring team: (L to R)
Dittmer, Bains, Shegog and Gilchrist
percent each year. At the time of closing, Rockspring had
called down £82 million of the equity for four acquisitions.
Rockspring reportedly started raising money for the fund
in the first half of 2008 but abandoned the effort following
the credit crisis. All credit to the firm then for perseverance
and for finally corralling an impressive amount of capital at
a tough time for fundraising.
to €750 million. Seeded with assets from ECE – the company
owned by the Otto family – the shopping centre fund has won
commitments from the Government of Singapore Investment
Corp and a German insurance company, among others.
Of course, Europe is not just all about core. REPFG also is believed
to have retained the mandate to raise the follow-on fund
to Neinver’s €480 million value-added Irus European Retail
Property Fund. Fund II also will target out of town shopping
centre deals and developments and is expected to target €450
million, ensuring REPFG is quickly off the fundraising starting
blocks in 2011.

We are honored to receive the PERE 2010 North American
Fund of Funds / Secondary Fund of the Year Award for
the Morgan Stanley AIP Phoenix Global Real Estate
Secondaries 2009 L.P. Fund.
Many thanks to our investors for their continued support of our hard work
and our commitment to achieving their goals.
To learn more about Morgan Stanley Alternative Investment Partners (AIP),
please contact:
Christopher Golio, Managing Director
+1 212-296-0862
PMS 7463
chris.golio@morganstanley.com
Morgan Stanley alternative inveStMent PartnerS
Private Equity | Hedge Funds | Real Estate
Distributed in the U.S. by Morgan Stanley Distribution, Inc. © 2011 Morgan Stanley
PMS 7462

EuROPE
FUND OF FUNDS FIRM OF THE YEAR
1. Aviva Investors
2. Composition Capital
3. Madison international realty
Aviva Investors Real Estate Multi-Manager,
part of the UK insurance firm’s
asset management business, enjoyed a
mix of mandate wins and fundraising in
2010. For example, it pitched and won a
contract to manage 34 unlisted real estate
holdings of Dutch pension fund Stichting Pensioenfonds Medisch
Specialisten in a mandate that also involves advising on
the fund’s future global strategy.
On the fundraising side, Aviva held a first close last year
on a global recapitalisation fund, raising initial commitments
for a vehicle with a target of at least $500 million. According
to those familiar with the strategy, the fund will look at
recapitalisations and secondary opportunities, but it also has
the flexibility to invest in real estate directly.
With €5 billion in assets under management, Aviva’s
multi-manager business is led by global director Nick Mansley.
John Gellatly is in charge of the UK and Europe. The ambitious
multi-manager group also hired former BNP Paribas
Investment Partners real estate head Bart Coenraads to lead
and expand its activities in Asia – a move it presumably feels
will bolster its global model and aid fundraising efforts.
EuROPE
LAW FIRM OF THE YEAR
(FUND FORMATION)
1. Clifford Chance
2. nabarro
3. Mayer Brown
For Nigel Hatfield and Clifford Chance’s European fund formation
team, 2010 was a typical year. Maybe it was a bit better
than the previous two years, but typical nonetheless. So
perhaps it isn’t surprising that, for the fourth year in a row,
Clifford Chance has won the title of Europe Law Firm of the
Year for fund formation.
Notable examples of European fund assignments included
advising on Rockspring Property Investment Managers’ UK
Value Fund and Legal & General Property’s UK Property
Income Fund. On the Rockspring fund, Clifford Chance advised
the London-based investment firm on its £336 million
($502 million; €408 million) final closing. For Legal & General,
the law firm advised on a £175 million first close for a
core property fund that is targeting a final close of around
£500 million. Clifford Chance also worked on fundraisings
and related projects for a number of other firms, including
Pramerica Real Estate Investors, MGPA and RREEF.
20 PERE | 2010 AwArds & AnnuAl review
Gellatly: winning
mandates
EuROPE
DEBT PROVIDER
OF THE YEAR
1. Eurohypo
2. inG real estate Finance
3. deutsche Pfandbriefbank
Nominations for Europe Debt Provider
of the Year did not exactly draw
a crowded field of competitors, particu-
larly given the depressed state of real estate funding in Europe
in 2010. In the end, it likely was Eurohypo’s dedication to the
market that helped the bank to its win.
The German lender, part of Commerzbank, has been notably
active in originating new loans, including a £122.7 million
(€144 million; $197 million) loan to Aerium to buy 3 Hardman
Street, an office in Manchester. Another example saw
Eurohypo team up with Deutsche Pfandbriefbank to finance
London-based Perella Weinberg’s acquisition of the Ruhr-
Park Shopping Centre in Bochum, Germany.
In total, Eurohypo originated €2.4 billion in new loans in
the first half of 2010 – up from €698 million for the same period
in 2009, according to its semi-annual report. Indeed, the
bank is finding that real estate in many markets is now being
valued more realistically, meaning there are good financing
opportunities. Outside of Germany, it increased new lending
in Europe primarily in France and the UK, led by head of
origination Michael Acratopulo.
EuROPE
LAW FIRM OF THE YEAR
(TRANSACTIONS)
1. Clifford Chance
2. nabarro
3. Freshfields Bruckhaus deringer
Acratopulo: boosting
UK lending
After losing out to Freshfields Bruckhaus Deringer last year,
Clifford Chance was back with avengeance, advising on some
of the largest property deals in Europe last year. In the process,
the firm regained its title as Europe Law Firm of the Year
for transactions.
Notable transactions included advising the Canary Wharf
Group on JPMorgan’s £495 million acquisition of 25 Bank
Street in London. Clifford Chance also advised Tishman
Speyer on the sale of the Frankfurt OpernTurm to a joint venture
between GIC Real Estate and an institutional fund advised
by JPMorgan. That transaction, which reportedly had a
price tag of around €550 million, represented one of the biggest
single property deals of the year in the German market.
In another big deal, Clifford Chance advised a joint venture
between Oman Investment Fund and Hammerson on
the sale of the Bishops Square site to two funds managed by
JPMorgan Asset Management for £557 million.

ASIA INDUSTRY FIGURE OF THE YEAR
ASIA
1. Collin Lau, China Investment
Corporation
2. rong ren, Harvest Capital Partners
3. Goodwin Gaw, Gaw Capital Partners
When China Investment Corporation (CIC)
appointed former Starr International executive
Collin Lau to lead its real estate division
at the turn of 2009, it picked up a real entrepreneur
– flexible on deal type but consistently
able to execute on transactions, which
provide the Beijing-based sovereign wealth
fund with multiple exit options. Central to
his philosophy – and by inference, that of CIC
– is investing in deals that provide for long-term recurring income
and the prospects of reasonable capital gains. The door
is open to just about any type of real estate investment, blindpool
commingled funds included, so long as CIC “is able to
customise it to fit to our requirements” Lau said. “For me, the
option of having good long-term multiples is probably more
important than just capturing short-term IRR.”
As it happens, those familiar with CIC’s real estate division
have told PERE that it already has achieved outsized IRRs in
the 18 months or so that it has invested in real estate, with
some sources putting them in the high double-digits. Remarkably,
deals including the $6.8 billion recapitalization of
General Growth Properties and the forthcoming A$2.5 billion
(€1.8 billion; $2.5 billion) purchase of an Australian industrial
fund from ING Real Estate Investment Management
were transacted by an “amazingly small” CIC team. What is
certain is that CIC under Lau has exceeded expectations.
ASIA
DEAL OF THE YEAR
Lau: delivering
results
Almost as quickly as Bank of America Merrill Lynch (BoA ML)
could place the management of its ill-fated $2.65 billion Asian
Real Estate Opportunities Fund on the market, The Blackstone
Group was tipped as a bidder. On the surface, it immediately
made sense: Blackstone had offices in Hong Kong, Shanghai,
Tokyo and Mumbai but barely 15 staff members to fill them, as
its global real estate efforts were more active elsewhere. Still, the
private equity behemoth was probing for a viable entry into Asia.
However, not long after a marketing process for the fund’s
management started in the spring of 2009, due diligence revealed
potential litigation issues between the fund’s 25-strong group of
LPs and BoA ML over actions considered non-fiduciary. Those
FIRM OF THE YEAR
1. Harvest Capital Partners
2. the Blackstone Group
3. Angelo, Gordon & Co
Luck? Sound judgment? Call it what you will, but Harvest
Capital Partners has had a good 2010.
Starting the year with the announcement that it had corralled
$325 million for its CR China Retail Real Estate Development
Fund, the China Resources-backed firm led by chief
executive officer Rong Ren clearly gained traction from international
investors at a time when others struggled. The final
closing for the fund and its sister effort, an income-producing
assets fund also focused on retail, are yet to be formerly announced,
but PERE understands the firm has managed to attract
$800 million for both – one of the highest equity hauls
by any firm across Asia last year.
One reason for Harvest Capital’s success was that it had
pre-identified its investment pipeline ahead of taking the
funds on the road. The Hong Kong-based firm is to acquire
properties, many of which will be pre-leased, from SZITIC
Commercial Property, a Shenzhen-based development firm
in which China Resources is also an investor.
Regulation also was kind to the 40-person firm. In September,
the Chinese Insurance Regulatory Commission
ruled that China’s $670 billion insurance sector could invest
up to 10 percent of their assets into real estate. The ruling
came with some pretty restricting caveats, including no investments
in residential property or development. As Harvest
Capital has focused its efforts primarily on retail, having sold
most of its residential assets, it is perfectly placed to regard the
insurers as an ideal exit route.
1. The Blackstone Group’s takeover of Bank of America Merrill Lynch’s Asia Real Estate
Principal Investments platform
2. MGPA’s letting to Citibank at Asia square in singapore
3. Fortress investment Group’s acquisition of davinci Holding’s corporate debt
actions involved an ill-timed foreign exchange trade and valuations
adopted by the bank when it seeded the fund with its balance
sheet assets. Consequently, Blackstone dropped out of the
running for the fund even though the proposition had expanded
to include the management of the bank’s other Asian real estate
as well – a total portfolio valued at more than $8 billion.
Ultimately, the sale process faltered as the LPs turned the
screws on BoA ML. The result was a $650 million settlement for
the LPs and the transfer of the general partner and asset management
responsibilities to Blackstone free of charge. In one swoop,
Blackstone achieved critical mass in Asia, the pick of 60 staff and
the management of more than $2.1 billion of fee-earning assets.
2010 AwArds & AnnuAl review | PERE 21

ASIA
FUNDRAISE OF THE YEAR
1. Fortress Investment Group, $800 million Fortress Japan Opportunity Fund
2. Gaw Capital Partners, $373 million Gateway China real estate Fund iii
3. Angelo, Gordon & Co, $625 million AG Asia realty Fund ii
According to those familiar with Fortress Investment Group,
when the firm went to market with its debut Asia real estate
fund, there was quite a stir. Having a firm with a track record of
completing more than $50 billion in transactions globally seek
to ply its trade in Asia – in particular, Japan – proved irresistible
for the LP community. So much so, the fundraise was the largest
by an international private equity real estate business in the region
last year, predominantly supported by commitments from
non-US investors. Closed last June, the Fortress Japan Opportunity
Fund already has made 12 investments and called more
than 85 percent of its capital.
With particular expertise in real estate debt resolution, en-
ASIA LP OF THE YEAR
ASIA
1. China Investment Corporation
2. the limited partners of Bank of America
Merrill lynch’s Asian real estate
opportunities Fund
3. national Pension service of Korea
According to a 2009 annual report published last July, China
Investment Corporation (CIC) revealed it had built up a
global investment portfolio valued at $81.1 billion, of which
6 percent or $7.43 billion was alternative assets including
real estate. There may not be concrete figures yet available
for how large the portfolio grew last year, but there is no
doubt that real estate has become a significantly larger contributor
in 2010. “We’ve done quite a number of significant
direct transactions in the market,” real estate head Collin
Lau told PERE.
Incepted in September 2007, CIC was not in a position to
park meaningful capital into the market during the credit
crunch, leaving it perfectly positioned to capitalise on “oncein-a-lifetime
deals” in its aftermath. After joining Brookfield
Asset Management’s $5.5 billion Real Estate Turnaround
Consortium in 2009, CIC was able to benefit from the investment
club’s $1.7 billion investment into the recapitalization
of General Growth Properties last year.
As 2010 came to a close, another club deal transpired in
the form of an agreement to invest A$2.5 billion (€1.8 billion;
$2.5 billion) to purchase a 60-property industrial fund
from ING REIM. That deal, yet to be completed, was led by
The Goodman Group, yet another company recapitalized
by CIC. “People may view these deals as opportunistic, but
we see these as very high-quality assets that we want to hold
onto for a very long time,” Lau said.
22 PERE | 2010 AwArds & AnnuAl review
hanced further through the October appointment of Doug
Smith from Deutsche Bank, Fortress has picked up more than $2
billion of Japanese debt, including loans from units of collapsed
Wall Street bank Lehman Brothers, at substantial discounts.
Fortress also used the fund to take a controlling position in KK
daVinci in a deal that initially saw it purchase $230 million of
daVinci’s corporate debt. In one fell swoop, Fortress achieved
sheer scale in Japan as daVinci held approximately $9.6 billion in
assets under management at the time of the deal.
Tipped as a bidder for the real estate of Tokyo-listed lender
Risa Partners, expect the fund’s equity to fully be committed
anytime now and the emergence of a follow-up effort.
PLACEMENT AGENT OF THE YEAR
1. Citi Private Bank
2. Macquarie Capital Advisors
3. Park Hill real estate Group
To put into context just what kind of year Citi Private Bank
had in 2010, it’s best to consider its fundraising totals relative
to 2009. Citi Private Bank, through its Global Managed
Investments-Real Estate division, raised just $100 million
globally for its clients in 2009. And while it is true that markets
rebounded slightly, in Asia as elsewhere, Citi managed to
place $955 million globally in 2010, or almost 10 times more.
Among the successful fundraising stories in Asia for coheads
Kwang Meng Quek and Daniel O’Donnell was Harvest
Capital Partners’ CR China Retail Real Estate Development
Fund, for which the Hong Kong-based firm held a first closing
on $325 million last January. The vehicle was set up to
“capitalise on the rising consumerism and long-term economic
growth in second- and third-tier Chinese cities”, Meng
Quek noted.
Citi’s placement division in Asia is small – four staff in
Singapore and just three in Hong Kong – making its contribution
to the firm’s fundraising total that much more impressive.
Commenting on 2010’s activity, Meng Quek said
Asian and European investors were more active in real estate
investments as those in the US “remained in recovery mode
from the downturn”. While most global investors sought core
investments, he perhaps contrarily found that the investors
Citi worked with favored opportunistic outlays. No wonder
then that he told PERE that Citi Private Bank will be focused
on opportunistic investments in emerging markets, which he
determines “are attractive to our client base and have the potential
to deliver appealing returns.”

Brazil Canada China France Germany India Italy Luxembourg Mexico Panama
Poland Russia Spain Turkey United Arab Emirates United Kingdom United States
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Coca-Cola
PricewaterhouseCoopers
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Verizon
ExxonMobil
Shell
JPMorgan Chase
Wells Fargo
Harris Bank
Shook, Hardy & Bacon LLP
KPMG
U.S. Bank
Deloitte
Food and Drug
Administration
First American Title
American Bar Association
Merrill Lynch
Ernst & Young
Van Kampen Funds
Discovery Communications
Union Bank
Safeway
Fleishman-Hillard Inc.
Northwestern University
Sodexo
FedEx
Fulbright & Jaworski
King & Spalding LLP
Clark Construction Group LP
CB Richard Ellis
Deutsche Bank
GE Capital
Chevron
Accenture
EPA
GE Healthcare
UBS
Marsh
Bingham
WorldBusiness Capital Inc.
Canadian Imperial Bank of
Commerce
Simpson Thatcher Bartlett
Red Hat
Kirkland & Ellis LLP
The Simons Group
Foley & Lardner LLP
Chapman & Cutler
RMB Capital Management
Bovis Lend Lease
Proskauer Rose LLP
Ungaretti & Harris
C.H. Robinson
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ASIA
FUND OF FUNDS FIRM OF THE YEAR
1. CBRE Investors
2. Partners Group
3. uBs Global Asset Management
One of the jewels of ING REIM is its Asia
business. CBRE Investors will no doubt regard
that a key driver behind its forthcoming cor-
porate takeover of the real estate fund group, as its direct fund
exposure to Asia to date has been limited. Its multi-manager
business, however, is clearly highly rated. Of all the funds of
funds in the market in Asia in 2010, the platform, led out of
London by Jeremy Plummer, has been the only one to reach a
final closing. Furthermore, its Asia Alpha Plus fund, the second
of its FoFs for Asia, exceeded its capital-raising target by
almost $70 million, finally closing in July on $269 million.
According to Plummer, one of the major draws for Asia
Alpha Plus was the pre-identification of underlying funds
with which it wanted to invest. J-curve fighting he called it,
explaining that just one month on from final closing the vehicle
was 80 percent invested in existing funds. Rather than
provide blind capital, CBRE Investors opted instead to buy
out secondary positions or provide additional equity to funds
that already were well into executing their strategies. One example:
Fortress Japan Opportunity Fund, winner of PERE’s
Asia Fundraise of the Year award. Looks like winners can sift
out other winners.
ASIA
DEBT PROVIDER OF THE YEAR
1. HSBC
2. sumitomo Mitsui Banking
3. iCBCi international
HSBC was quite active in 2010 in providing debt solution to
real estate companies in Asia. The bank was particularly active
in Regulation S offerings, which are sales made outside
the US without registration.
Among the bank’s notable deals was a Reg. S $500 million
fixed-rate notes issue for New World Development, which
was the first US dollar issue of 2010 in Hong Kong. The bank
also led a Reg. S $500 million fixed-rate notes issue for Shimao
Property Holdings and a Reg. S $600 million fixed-rate
notes issue for Hongkong Land Company.
Beyond just standard Reg. S offerings, HSBC also placed a
few such deals privately under 144A rules. Most notably, the
bank led a $300 million Reg. S /144A offering of fixed-rate
notes for the Yanlord Land Group and a $200 million Reg.
S /144A issue of fixed-rate notes for Powerlong Real Estate
Holdings. But HSBC saved its biggest and best deal for last,
wrapping up the year with a Reg. S $1 billion fixed-rate notes
issue for China Overseas Land & Investment.
24 PERE | 2010 AwArds & AnnuAl review
Plummer: can
smell a winner
ASIA
LAW FIRM OF THE YEAR (TRANSACTIONS)
1. Baker & McKenzie
2. Haynes & Boone
3. Paul Hastings
A newcomer to the Global PERE Awards, Baker & McKenzie
gained its title as Asia Law Firm of the Year for transactions
on the strength of several noteworthy deals and good overall
volume. In fact, the Chicago-based law firm advised on transactions
with a total deal value of approximately $5 billion in
the Asia-Pacific region last year.
Notable transactions included advising CapitaLand China
(RE) Holdings in its $2.2 billion acquisition of Orient Overseas
Developments and working with the Gandel Group on
its participation in the Charter Hall Group’s capital-raising
effort to purchase Macquarie Group’s core real estate management
platform for a total of A$297 million ($301.5 million;
€220 million). Baker & McKenzie also advised the Hong
Kong Housing Society on its HK$1.325 billion ($170 million;
€124 million) purchase of the Fortis Centre, a 32-story Grade
A office located in Quarry Bay, Hong Kong.
In other significant deals, Baker & McKenzie advised La-
Salle Investment Management, on behalf of the LaSalle Asia
Opportunity Fund III, on its A$140 million purchase of the
landmark Sofitel Sydney Wentworth hotel. The firm also
advised LaSalle on the purchase of an office building at 179
Elizabeth Street in Sydney for A$95 million. Both transactions
were firsts for LaSalle in Australia.
ASIA
LAW FIRM OF THE YEAR
(FUND FORMATION)
1. Clifford Chance
2. Baker & McKenzie
3. Paul Hastings
After getting bumped from the top spot last year by Mayer
Brown, Clifford Chance is back as Asia Law Firm of the Year
for fund formation. Part of the firm’s allure to local GPs is
the fact that it is one of the few firms in the region to have a
dedicated funds team in Singapore, which is an important
fund structuring jurisdiction.
Some examples of Clifford Chance’s Asia fund assignments
included advising Phoenix Property Advisors on the
establishment of its Asia Real Estate Investments IV fund
and advising Winnington Capital on the establishment of
its Trophy Property Development II fund. Winnington held
an initial closing in June and is targeting aggregate commitments
of $1 billion by the third quarter of 2011.
Clifford Chance also worked on Prax Capital’s first fund
focused exclusively on real estate. That fund, Prax Capital
Fund III, will target real estate projects in China.

AnnuAL REVIEW

GLOBAL TREnDS PREVIEW
Second half events auger 2011 trends
strategic shifts and new developments in private equity real estate in the
second half of 2010 offer clues to global trends for 2011
By erik Kolb
Many of the trends in private equity real estate for
2011 are likely to have had their genesis in the latter
half of 2010. Whether it is the continuation of a
trend that already emerged last year or reaction to an event or
development that occurred in 2010, much of what transpires
this year with regard to LPs, GPs, regulation and the lending
environment will takes its cues from 2010.
lPs to play less safe
Some of the bigger trends to emerge among LPs in 2010 included
greater use of co-investment models and club deals, as
opposed to investing through commingled funds; a renewed
focus on core assets in top-tier markets; and the desire to invest
alongside local real estate operators, as opposed to global
allocators. Most of these trends were the result of LPs’ desires
to re-take control of their investments and play it safe in the
wake of the financial crisis.
Market players, however, believe these trends
will be short-lived as investors’ appetite for risk
grows and more over-leveraged properties come
to market. Jacques Gordon, global strategist at
LaSalle Investment Management, said LPs that
focused solely on core will begin loosening up as
last year’s intense focus on core has created its
own risks. Howard Roth, global and Americas
real estate head at Ernst & Young, added: “The
problem is that core is back to 5 percent cap rates,
but pensions need better returns from real estate
to meet actuarial obligations in the future.”
In the US and Europe, the largest and most
liquid markets benefitted the most from capital
flows in 2010, and that trend is expected to continue this year.
But some of these flows will start to shift to secondary markets
later in 2011, as investors search for yield and relative value. In
addition, Gordon believes the long-awaited disgorgement of
distressed debt will start to pick up steam in 2011 as regulations
on both sides of the Atlantic force banks to change their
policies.
In Asia, there are fewer domestic LPs, with the exception
of Australia, so much of the activity has centered on sovereign
wealth funds like China Investment Corporation, National
Pension Service of Korea and Australia’s Future Fund.
According to Simon Treacy, group chief executive officer at
MGPA, another reason is the fact that many sovereign funds
are underweight to real estate and looking to build up their allocation.
However, he added that, like other large LPs around
the globe, many of them are taking a more direct approach to
their investments or investing through club deals.
26 PERE | 2010 AwArds & AnnuAl review
GPs to adapt or perish
Much like the LPs they service, GPs also were reactionary. But
not only were they reacting to the financial crisis, they also were
reacting to strategic changes made by LPs. Some of the bigger
trends to emerge among GPs in 2010 included offering smaller,
more targeted funds in the wake of a difficult fundraising market;
lowering return expectations for new offerings as well as existing
investments; and looking to consolidate with like-minded
GPs if staying in the game or devising an exit otherwise.
Indeed, 2010 saw the beginnings of a shakeout among investment
managers and private equity firms. Big players, like Citi
Property Investors, Lehman Brothers and Bank of America
Merrill Lynch, exited the business through sales and closures,
while new players like Peakside Capital and Silverpeak Real Estate
Partners were formed through management-led buyouts.
And, of course, there was straightforward consolidation, not the
least of which was CBRE Investors’ acquisition of
most of ING Real Estate Investment Management.
Barring those strategies, GPs looking to tough
it out will need to diversify their platform. “Those
that stay will need to broaden and diversify their
business with complementary products, such
as coming down the risk spectrum to core-plus,
offering separate accounts and structuring club
deals,” said MGPA’s Treacy.
And good news for those GPs treading water
due to legacy issues: Gordon believes the restructuring
and resolution of vintage year 2005 to 2007
funds will pick up in volume this year. GPs are
working with existing LPs and new sources in exchange
for preferred and senior returns, he noted,
explaining that this strategy is more about keeping afloat until
the recovery hits the funds’ investments. “It currently is the only
alternative to turning off the lights,” he added.
That said, hiring in the private equity real estate industry is
expected to be stronger than last year. This will be the result of
a number of trends, including the need to address the changing
skill sets currently required by the market and renewed fundraising
efforts around the globe as capital returns to the market,
according to Bill Ferguson, co-chief executive officer of FPL Advisory
Group, a Chicago-based executive search and compensation
firm focused on the real estate industry.
Indeed, last year’s dramatic shift to core assets and ratcheting
down of risk caught many firms unprepared, said Michael Herzberg,
co-chief executive officer of FPL Advisory, adding that
those firms now are bringing in the expertise in order to offer
the service. In addition, aspiring global firms will continue their
push by building out their platforms, Ferguson noted.
Gordon: risk is back

Taking all this into consideration, cash compensation will remain
relatively flat in the industry, Herzberg said, but a larger
bonus pool will create the sense that compensation is on its way
back up.
the great regulatory hurdle
On the regulatory front, 2010 saw an unprecedented level of
initiatives begin to take shape as governments around the globe
sought to reduce risks in the financial system. In Europe, the
Alternative Investment Fund Managers (AIFM)
directive and the Solvency II legislation are likely
to have Europe-wide implications for all asset
classes, including property. Meanwhile, in the US,
the Dodd-Frank Act and the Volcker Rule are expected
to have a similar impact.
Gordon sees private equity real estate facing “a
1-2-3 punch.” The first is broad financial regulation,
including the Dodd-Frank Act in the US and
European Market Infrastructure Regulation in
Europe. The second is insurance regulation, specifically
Solvency II, which is scheduled to hit this
year. And the third is global banking regulation,
courtesy of Basel III. All three have tremendous
implications for investors starting this year, so GPs
and LPs need to be planning for these, he said.
Stephen Tomlinson, senior partner in the real estate practice
group of Kirkland & Ellis, believes Basel III and its capital reserve
requirements will have a more powerful effect than the Volcker
Rule, creating greater pressure to exit the business through a sale
or by winding down. “This plays into the consolidation trend on
the GP side,” he added.
The proposed Solvency II legislation, a review of the capital
adequacy requirements for insurance companies in the European
Union, could result in these investors reducing allocations
to real estate. As it stands, the guidelines would
require them to reserve 39 percent for real estate.
This could prompt a retreat from the sector and a
release of stock into the market, or conversely an
increased appetite to move up the risk curve to
justify the risk capital.
Philip Cropper, head of real estate finance at CB
Richard Ellis, is one of those who believe Solvency
II would actually make real estate a more attractive
place to put capital. Provisions within the rule
would make insurers more likely to provide debt
funding and fill the gap left by banks, he explained.
In the US, the Dodd-Frank Act restricts banks’
investment in equity and hedge funds, while the
Volcker Rule will prevent banks and large financial
organisations from making equity investments in commercial
real estate, limiting them to providing debt financing. As a
result, many large banks that have real estate investment arms
either have or are thinking about selling off the business, Roth
said.
Other regulatory issues include European derivatives legislation,
which would require those using swaps to hedge interest
rates on their debt to mark to market daily and hold capital
against those positions, and changes to accountancy standards.
“If you are a tenant and take a lease on a property on your balance
sheet, you will need to recognise the long-term liability
obligations of that lease,” Cropper said, adding that the change
would put pressure on shorter leases. In addition, the benefits of
sale-leasebacks would diminish under the new rules.
A bit more liquidity
Although the financing markets have been tough for investors
in commercial real estate since the credit crunch, debt availability
is likely to improve in 2011. Still, it may be one
step forward and two steps back, as Basel III and
Solvency II could limit the availability of funding
from several usual sources. At the least, it may take
longer for normalised lending activity to return.
One encouraging sign for the market, though,
is the return of CMBS. John D’Amico, chief executive
officer of the CRE Finance Council, noted that
roughly $8 billion was issued in the US in 2010,
including $2.7 billion in the last three months.
About a dozen banks are active again and insurance
companies are likely to soon join in, he
added. But new issues will be different than those
of the past, Roth said, noting that structures will
be simpler with less tranches and the underlying
loans will have lower loan-to-value and higher debt-servicecoverage
ratios.
Although the CMBS market is expected to grow to $40 billion
this year and $100 billion in 2012, that volume still only represents
14 percent of the need, D’Amico said, noting that roughly
$1 trillion in real estate debt is set to mature over the next two
years. “Private capital will need to fill this gap,” he added. Luckily,
life insurance companies and mortgage REITs also are expected
to be more active sources of capital over the next two years.
In Europe, however, there was no CMBS activity in 2010.
Banks there want to see the securitisation market
recover, but they will need to retain stakes in the
loan pools they originate. “The European market
was frozen in 2010, except for covered bonds, but
it is likely will see some deals come through this
year,” Cropper said.
With regard to lending in Asia, Treacy said the
region has ample liquidity except for Japan, and
even that market is starting to come back in Tokyo,
albeit at lower levels. Basel III, however, will
create a big question mark on the willingness of
banks to lend, he noted.
However, according to D’Amico, the biggest
Treacy: beware Basel III
concern with financing is the equity gap created
by decreased property values and lower loanto-value
ratios. The question becomes who will cover this gap.
Because a further reduction in prices does not seem likely, the
gap is most likely to be addressed by either new players or new
money entering the market, he said.
Overall, D’Amico has a positive outlook for 2011 and beyond.
“The market has seen the worst, and we look forward to a turnaround,”
he said. In summary, he predicted three main trends
for 2011: “the certainty of regulation, the resurgence of securitisation
and the closing of the equity gap.”
D’Amico: CMBS returns
2010 AwArds & AnnuAl review | PERE 27

QuotABles
Memories of 2010
From the frustration of new regulation in india to disappointment at the deals the us
market had to offer, real estate professionals offered memorable advice about the
industry in 2010. Here, we remember the best of what some of them said
January
“we have two classes of
forecasters: those who don’t
know and those who don’t
know they don’t know.”
-Howard Marks, chairman of
Oaktree Capital Management
April
“i’m no good with people
who pretend a certain
knowledge when in fact they
know absolutely squat.”
-Mark Burton, former chief
investment officer of Abu
Dhabi Investment Council and
now advisor to Norges Bank
Investment Management
July
“Most of it’s crap.”
-One panelist describing the
quality of US deal flow in 2010 at
IMN’s tenth annual US real estate
opportunity and private fund
forum in New York
October
“in this market, nothing will
come easy or quickly.”
-Mark Antoncic, Trilyn managing
director, arguing US real estate
returns will be low double digits
for the foreseeable future
28 PERE | 2010 AwArds & AnnuAl review
February
“the notion of investing
with a fund sponsor as an
unchanging, long-term
relationship is an unrealistic
aspiration, with limited chance
of success in the real estate
fund market, as people and
institutions change over time.”
-Probitas Partners’ winter real
estate report
May
“they were examples of funds
that were frankly just too big,
and they lost control of their
ability to make investments.”
-Sam Zell, chairman of Equity
Group Investments, referring to
Morgan Stanley’s and Goldman
Sachs’ funds at the ULI spring
conference
August
“there are old assets out there
waiting for a new home.”
-Rob Harper, managing director
of The Blackstone Group, talking
about an anticipated pick-up in
hospitality transactions at New
York University’s international
hotels conference
november
“this is taking one step
forward and three steps
back. it sends all the wrong
messages to the investment
community.”
-Sachin Shah, Samsara Capital
founder, talking about new
investment lock-in periods for
foreign direct investment in India
March
“i would have made more
income selling ice cream in
the park the last two years.”
-An anonymous fund executive
as quoted by Gary Koster, Ernst &
Young’s former head of Americas
real estate fund services
June
“Just give us $500 million to
play with, and we’ll see how
good we are.”
-Jerilyn Harris, chair of the
legislative committee at the
California State Teachers’
Retirement System, after a day of
role-playing as investment staff
September
“He that stands as a surety for
the debt of others will smart
for it.”
-Lewis Ranieri offering advice to
US Treasury Secretary Timothy
Geithner at a government-led
panel on the future of housing
finance
December
“if you act like sheep, expect
to get fleeced.”
-Nori Gerardo Lietz offering
advice to LPs thinking of rushing
into core real estate at the PERE
Forum: New York

AnnuAL REVIEW | AMERICAS

AnnuAl review | intelleCtuAl ProPertY
America’s bifurcation
it was a tale of two countries for the us in 2010, with select markets and players
focused on core trophy assets having it all and everyone else left to sort through
the rubble of the crisis
By Zoe Hughes
Two Americas confronted real estate
investors in 2010. The first America was
a place where buyers squeezed into auction
rooms for the possibility of snapping
up core assets at heavily discounted
prices only to see cap rates sink to
pre-bubble levels. It was a place where,
for those with cash and cash-flowing
properties, debt and equity financing
was plentiful and where, for those with
an established track record, the fundraising
doors were actually open. This first America was a
place where the real estate “haves” could finally brush off the
terrors of the past two years.
For the “have-nots”, however, a second, completely different
America emerged in 2010. Away from the core properties
of the prime cities, the rest of America and its diverse
real estate markets experienced a credit environment
where spreads often brought tears to many a veterans’ eye
and where large amounts of fresh equity usually were required
for mortgage refinancings and extensions. It was a
place where deal flow sometimes
required the wearing of a Hazmat
suit and where the fundraising
spigot was literally turned off.
For anyone watching US real
estate markets in 2010, the bifurcation
of America was clear to
see. On one side, a small number
of assets, markets and players reentered
the real estate market with
vigour. On the other side, everything
and everyone else still tended their wounds from the
credit crisis.
Of course, after suffering declines in property valuations
of up to 50 percent, it is only natural for investors to retreat
to safety. In real estate, that means core, stabilised assets in
24-hour gateway cities. In the real estate investment management
world, safety is perceived in fund managers with a
strong track record to call their own.
Such instincts, however, were exacerbated in 2010, thanks
to the sheer wall of equity sitting on the sidelines and waiting
for an opportunistic time to invest. Unlike other crises
before, sovereign wealth funds, cash-rich GPs, REITs and
non-traditional real estate investors all lined up to target US
30 PERE | 2010 AwArds & AnnuAl review
On one side, a small number
of assets, markets and players
re-entered the real estate market
with vigour. On the other side,
everything and everyone else
still tended their wounds
real estate, predominantly core assets in the best cities.
What resulted was classic supply and demand theory. By
the end of the year, veteran GPs were warning of the formation
of a debt and equity bubble, where lending was once
again becoming “undisciplined” and cap rates in some sectors
compressed to sub-5 percent. For managers trying to
raise capital for value-added and opportunistic strategies,
LPs were largely uninterested. For those with established
programmes and funds, some investors even urged their
GPs to commit dreaded style drift and alter course to core.
Yet even with this attention on core, value-added and opportunistic
debt and equity players were not being left to revel
in the remaining distress of the market. US property transactions
may have risen 141 percent year-on-year in 2010, but
deal flow at year-end was still just 24 percent of the peak witnessed
in 2007. Opportunities, especially at prices that made
sense for private equity real estate GPs, were still few and
far between. And where they did exist, opportunities were
akin to hand-to-hand warfare. Debt workouts, recapitalisations,
restructurings and discounted payoffs required untold
amounts of patience, energy and working capital.
Indeed, capital is the crux of the
problem facing GPs targeting the
US in 2011. After raising just $24.3
billion of global value-added and
opportunistic capital in 2010 (compared
to more than $85 billion at
the peak), the firepower of private
equity real estate GPs will be severely
limited in comparison to the
many other players in the market.
Take, for instance, the real estate
investment intentions of half a dozen sovereign wealth funds
and you probably have the equity capabilities of 50 percent of
the US REIT market, which have been on fundraising fire in
the public markets over the past 18 months.
Private equity real estate GPs simply cannot compare, and
it’s not something that is expected to change dramatically in
2011. Managers with scale and track records will undoubtedly
raise capital in 2011, but few industry professionals
expect any fundraising records to be broken in the coming
year, adding further pressure to the industry’s ability to take
advantage of distressed opportunities when they do (finally)
emerge. The tale of two Americas, therefore, can expect to
be retold again in 2011.

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CoMMentAries | AMeriCAs
Rise of the LP
excerpts from the best of PERE’s ‘intellectual Property’ columns show the balance
of power shifted back to lPs in 2010, while GPs struggled against the tide
In all fairness
the case of a GP asking its investors to refund
partially unclaimed deal fees for an investment
it already had written off caused consternation
among some lPs
A hypothetical question to all
GPs: you’ve written down a
real estate fund investment to
zero but belatedly realise you
have not charged your limited
partners the full amount of
the acquisition fees for the asset.
Do you forgo the remain-
ADIA: unfairly targeted ing deal fees in recognition of
the fact you’ve already written
the asset off or do you issue a capital call to your investors to
recoup the fees?
In the last quarter of 2010, one opportunistic fund manager
choose the latter course, issuing a “gigantic” reserve commitment
call to Abu Dhabi Investment Authority (ADIA) to refund
acquisition fees it hadn’t yet collected. PERE understood at the
time of the capital call that the GP in question was claiming fees
it was legally entitled to according to a “literal reading” of the
fund documents. But, after writing off the underlying investment,
there was more than just economics at stake – there was a
fundamental “question of fairness”.
The ADIA capital call was not necessarily a one-off event, with
other LP sources telling PERE about some funds clawing back LP
distributions, as well as making additional capital calls to cover
management fees when fund asset cash flows faltered. However,
most industry professionals – both GPs and LPs – would agree
that now is not to time to be nickel-and-diming investors.
Risks at the core
in 2010, us core was dubbed more risky than
many value-added or opportunistic strategies.
For some lPs though, life’s too short to start
climbing back up the risk spectrum
It is human nature that, after a fall, we pay much more attention
to what we’re doing and become proactively risk-averse, seeking
the safest options on the way ahead. Such a reaction gripped the
US real estate investment community in 2010.
With almost 43 percent of all equity targeting the US eyeing
core and core-plus investments, according to the 2011 Emerging
32 PERE | 2010 AwArds & AnnuAl review
Trends report from the Urban Land Institute and PricewaterhouseCoopers,
there were mounting fears that the sheer weight
of capital focused on the core sector was making it as risky as
some value-added and opportunistic strategies.
Indeed, the focus on core was helping push cap rates for some
deals down to levels not seen since 2005 and 2006, raising questions
of where future demand for commercial real estate would
come from. And in a market where corporate and individual
spending was still subdued, how could investors underwrite annual
rent growth of between 10 percent and 12 percent for the
next three years, as was seen in one Manhattan office deal in
October last year?
At the heart of the core attraction, though, was something
more human than most fund managers probably appreciate. It
is simply that “life is too short,” as one US pension investment
officer told ULI and PwC. “I get paid as much for achieving solid
8 percent returns through core as for making bigger returns on
opportunistic strategies, without the higher risk of losing my
job if I bomb.”
SEC seal of approval
real estate GPs hoped to avoid new laws
requiring seC registration thanks to existing
investment company rules, but it could be a
mixed blessing at best
When Congress passed new financial reforms in July 2010, it
seemed real estate fund managers had been swept up in the race
to regulate the private equity industry once and for all. However,
notwithstanding the new rules, real estate funds managers
were hoping exemptions under another act – the Investment
Company Act of 1940 – could help them avoid the burdens of
registration.
Under the 1940 Act, funds investing primarily in real estate,
real estate liens or mortgages may be exempt from registering as
an investment company. By not having a fund registered as an
investment company, therefore, many real estate fund managers
anticipate they won’t have to register as an investment advisor
either.
It’s something that should have prompted most real estate
GPs to run into the streets singing Hallelujah. But is avoiding
SEC registration something to celebrate?
As real estate GPs in fundraising mode will attest, limited
partners today are extra vigilant when it comes to due diligence.
In the wake of Bernard Madoff and others, when an LP considers
a new commitment to a fund, it wants to be able to tick off
certain boxes. One of those boxes could be SEC registration.

As one real estate deal professional argued to PERE, for many
of the larger institutional investors, registration – in essence, the
SEC’s seal of approval – will be an absolute must. “This is a game
changer in terms of how a firm markets itself,” he said.
Recap impasse
By backing a recapitalisation plan for
stockbridge real estate’s $1bn Fund ii, were its
lPs helping kick-start a turnaround or postponing
inherent problems?
Many GPs spent much of the past two years facing several unpleasant
truths about their portfolios, mainly that they paid
too much and employed too much leverage. In 2010, in order
to salvage some value from their funds and deals – and with it
their reputations – many fund managers asked LPs to dig a little
deeper in their pockets to allow for a recapitalisation.
In being asked to put up rescue capital, however, LPs faced a
dilemma. Aside from questioning whether the fund or deal is
worth recapitalising in the first place, are LPs rewarding GP failure
by investing additional cash or just being pragmatic about
trying to recoup some equity from a troubled situation?
Los Angeles Fire and Police Pensions (LAFPP) faced that
situation in the summer of 2010 as an investor in the $1 billion
Stockbridge Real Estate Partners II fund. After several recapitalisation
plans were rejected by LPs, San Francisco-based
Stockbridge succeeded in proposing a new, final plan to LPs
that addressed investors’ concerns regarding debt load, priority
payments and management fees. Under the plan, LAFPP might
see a potential return on its original and recap commitment of
between 31 cents and 69 cents on the dollar.
The caveat in all this, of course, is the word “might”.
On-demand LPs
A growing trend among us public pensions to
broadcast board and investment committee
meetings was an opportunity for GPs to win new
lP relationships
On 2 December 2009, Wes
Edens, co-founder of Fortress
Investment Group, walked
into the Oregon Investment
Council for a candid conversation
about the performance
of his funds. Like most private
equity and real estate
Edens: publicity via Oregon funds, Fortress’ performance
was taking a hit. Indeed, the
firm’s $5 billion Fortress Investment Fund V, closed in 2007, was
projecting a 0.44x multiple at the time.
So when Nori Gerardo Lietz, chief strategist for private real
estate at Partners Group and Oregon’s consultant, challenged
Edens over whether Fortress could ever return the pension’s
investment “100 cents on the dollar”, Edens admitted that for
Fund V “it’s not likely you’ll make two times your money.”
What was surprising is that such private conversations between
LP, GP and consultants increasingly are making it into the public
eye, as US public pensions raise the level of transparency into
their operations – and investments.
The conversation between Gerardo Lietz and Edens was part
of the pension plan’s normal policy of disclosure, but Oregon
was not alone in opening its doors to greater public scrutiny. In
July, the $94 billion Teachers’ Retirement System of Texas also
started webcasting its full board meetings, although not its investment
management committee sessions.
While many real estate GPs would balk at such openness,
those worth their salt should see the increasingly open nature
of their business as an opportunity to set themselves apart
from the rest of the crowd, rather than an assault on a private
industry. By being one of those fund managers that openly and
honestly communicates with its LPs – and is publicly seen to be
doing so – a GP can boost his or her reputational standing with
a vast gamut of investors at the click of a button.
Public market envy
Private real estate funds considered taking their
portfolios public as they faced sunken values
and a moribund fundraising market. would the
public market’s attraction prove short-lived?
In late January, Michael Fascitelli, chief executive officer of Vornado
Realty Trust, underscored one of the predicaments facing
private equity real estate funds today given the tough fundraising
environment. In reportedly trying to raise $1 billion for its
debut private equity real estate vehicle, Vornado Capital Partners,
he told a New York real estate conference that it would take
him no more than two days to raise the same amount in the
public markets.
The same certainly cannot be said of the private real estate
markets, with 2010 fundraising levels sinking below even the
trough experienced in 2009. Such a fundraising disconnect was
prompting some private real estate fund managers to eye the
public markets with envy.
Howard Roth, global head of real estate at Ernst & Young,
said several private equity real estate firms were looking to “roll
up” assets from one or a number of funds into publicly-traded
REITs. “It’s definitely an idea that’s percolating,” he said. Indeed,
in the February 2011 issue of PERE, RLJ Development was
said to be exploring such an idea for its Urban Lodging Fund II
and Fund III.
However, aggregating fund assets into a REIT IPO is no easy
matter and, for all its faults, the private fund model remained a
compelling investment model in 2010. For those GPs in search
of answers to portfolio problems, it may well pay better not to
covet their public cousins too much.
2010 AwArds & AnnuAl review | PERE 33

toP stories | AMeriCAs
A hostile environment
excerpts from the 10 most-read stories for the Americas track major reunions and industry
trends amid tough conditions
1Friends reunited
sonny Kalsi, the former global head of
Msrei, joined forces with his colleagues
John Carrafiell and Fred schmidt to form
Greenoak real estate Advisors
Morgan Stanley Real Estate Investing (MSREI) was never
long out of the mainstream media’s headlines in 2010, but
the story that dominated the attention of PERE readers last
year was the founding of GreenOak Real Estate Advisors by
ex-MSREI veterans Sonny Kalsi, John Carrafiell and Fred
Schmidt.
PERE first broke the news in April, revealing the trio was
creating an independent platform that would raise capital
targeting distressed Japanese real estate as well as European
workout advisory activities and select US and Western European
deals. Called GreenOak, Kalsi, Carrafiell and Schmidt
also secured the financial backing of Dutch-listed investment
company Tetragon Financial Group, which provided a
$10 million working loan and $100 million of GP co-investment
in return for a 10 percent stake in their nascent firm.
In joining forces with Carrafiell and Schmidt, Kalsi rekindled
professional relationships that began more than a decade
earlier at Morgan Stanley. Kalsi had worked alongside
Carrafiell as co-global head of MSREI between March 2007
and December 2008, while Kalsi had worked with Schmidt
between 1998 and 2006 when he was head of MSREI Asia.
GreenOak is based in London, New York and Tokyo.
34 PERE | 2010 AwArds & AnnuAl review
Azrack and Orf: together again
2Apollo landing
At the start of 2010, Apollo was selected
as preferred bidder for Citi Property
investors. By the end of the year, Joseph
Azrack had formally reunited his new and old
platforms and funds
Apollo Global Real Estate officially closed the deal to take over
Citi Property Investors in November, 16 months after the platform
was put up for sale and eight months after Leon Black’s
shop was selected as preferred bidder.
The deal followed a fierce bidding process that saw the New
York-based firm fight off competition from Macquarie Capital,
ING Real Estate Investment Management and Northwood
Kalsi, Carrafiell and Schmidt: the gang’s all here

Investors, among others. After being named among the
final three at the end of 2009, Apollo Global – led by former
CPI president Joseph Azrack – clinched the deal in
early March when it secured preferred bidder status.
The winning bid came as a result of garnering enough
support from the LPs in CPI’s three funds, as well as
from Citigroup and CPI executives, the former of which
typically invested up to $200 million per fund.
Apollo is believed to have paid a nominal fee upfront
for the platform, which Citigroup placed on the market
in August 2009, just four years after starting the real
estate investment management venture. Citigroup also
was expected to benefit from any future positive performances,
with the two firms agreeing a pre-determined
earn-out structure, people familiar with the matter said.
The takeover reunited Azrack with his former CPI
comrade Roger Orf, who was formally named head of
Apollo Global Real Estate Europe once the deal was
closed. He works alongside Apollo’s head of North
America, Ray Mikulich, and Grant Kelley, head of Apollo’s
real estate operations in Asia Pacific.
3Capping the year off
investors waiting for the us real
estate market to hit the 10% cap
rates of the early 1990s could be
disappointed after predictions that cap
rates would peak at 8% in 2011
It may have been billed the Great Recession, but the crisis
enveloping US commercial real estate was not expected
to match that of the savings and loan debacle of the early
1990s – with cap rates expected to peak at just 8 percent
by 2011.
A research report by CB Richard Ellis Econometric
Advisors early last year forecast that investors waiting
too long for the bottom could actually end up “disappointed”,
with appraised cap rates not expected to top
the 10 percent levels seen in 1994 and 1995 by some US
property sectors.
Indeed, CBRE said at the time the opportunity to buy
could come “sooner than [investors] expect and at less attractive
pricing than they would like”. It was something
keenly witnessed during 2010 in a variety of US real estate
markets as a lack of property transactions and a wave of
equity targeting the asset class combined to push cap rates
down to levels not seen since 2005 and 2006, particularly
for ultra-core properties in prime markets. In Manhattan,
core office properties trading at sub-5 percent caps
frequently hit the headlines, leaving many private real estate
investors scratching their heads in wonder.
“Well-leased buildings purchased at low cap rates may
actually be more risky than investing in under-leased
or capital-stressed investments where the opportunity
exists to drive cash flow and add value,” a white paper
from advisory firm Hodes Weill & Associates declared
in October.
Best of the rest on
PEREnews.com [Americas]
in 2010
4
PLACEMEnT FEE DISCLOSuRES
In the wake of the US placement agent scandal, the California
Public Employees’ Retirement System released more than 5,000
pages of detailed documents in January highlighting what its GPs
paid placement agents in fees.
5
DE SHAW RESTRuCTuRES
DE Shaw launched a workout and restructuring group in
January in a bid to target lenders and borrowers troubled with
restructuring issues. Called DE Shaw Real Estate Advisers, the team
is co-led by the head of the private equity firm’s real estate group,
George Rizk, and senior vice president Matthew Coleman.
6
WARFARE WORKOuTS
Real estate investors were told by Colony Capital founder Tom
Barrack in July that they would have to work even harder just to
achieve single- and low double-digit returns. With real estate in more
developed countries expected to be “ordinary not extraordinary,”
the best opportunities were in debt workouts and recapitalisations.
Such deals were “hand-to-hand warfare … at the asset level,” he said.
7
GuGGEnHEIM SPInOuT nABS LEHMAn VETS
G2 Investment Partners, a spinout from Guggenheim Partners,
created a real estate platform in June targeting lending, debt and
equity investments. The firm is led by a raft of former Lehman
Brothers executives, including Kenneth Cohen, Larry Kravetz and
Charles Manna, among others.
8
REAL ESTATE SHAKEOuT
The industry was warned that it was headed for a “shakeout,”
with many firms unable to raise any capital for new funds, according
to Stephen Schwarzman, chief executive officer of The Blackstone
Group. “There will be a huge shakeout in [real estate],” he said.
“People have been devastated in that area, but it remains a big asset
class.”
9
DISTRESSInG OPPORTunITIES
Distressed real estate opportunities in the US attracted the
most attention from alternatives investors in 2010. A survey of
100 private equity, hedge fund, proprietary trading desks and
institutional investors voted US real estate the best distressed
opportunity in 2010, with 41 percent of respondents backing the
claim, compared to just 19 percent in 2009.
10
ALLOCATORS VS OPERATORS
The traditional private equity real estate business model of
allocating capital to operators for deals – thereby charging double
promotes – doesn’t work anymore, according to Castle Hill founder
and former Perry Capital executive Robert Stern. “I think we have to
be more open to sharing the promote with our operating partners
and vice-versa,” he said in June.
2010 AwArds & AnnuAl review | PERE 35

oundtABle | AMeriCAs
(L to R) McDermott, Lindsay, Giller and Casal: opportunistically cautious
Macro mindset
An excerpt from PERE’s us roundtable in september found the four participants cautious
about the prospects for a us economic recovery and what that meant for real estate
When it comes to real estate, macroeconomics is fundamental,
according to Ed Casal, chief investment officer for the global
real estate multi-manager team at Aviva Investors. “I think in
the real estate industry, we kind of ignored that for a while because
life had been good since the early 1990s,” he said. “Now,
everyone is looking at the economy, but there is still significant
debate about how this plays out.”
Yet, in looking at the wider economic issues facing the US
and its diverse property markets, no one argument won the
day. According to Jeffrey Giller, managing partner and chief
investment officer at Clairvue Capital Partners, long and flat
were two words that sprang to mind. And while it was probably
“overly punitive” to underwrite further market decline, “we are
[not] out of the woods yet with a double-dip recession,” he said.
Of course, when it comes to PERE’s roundtable events there
are no limits to the issues discussed. And for William Lindsay,
founding partner at PCCP, and Paul McDermott, managing
director at Rockefeller Group Investment Management, real
estate capital markets were front and centre.
Both told of their surprise at the speed at which some segments
of the lending markets had sprung back to life. McDermott
cited one potential Rockefeller deal in Washington DC
that had attracted five-year fixed financing at 3.9 percent, despite
just a 70 percent occupancy level. “Five-year quotes are
more aggressive than seven- and 10-year quotes, which today
are tougher to match up,” he explained.
Lindsay, though, argued it was the less active sector of the
lending community – such as specialty lenders funded by
CDOs, but also commercial banks – that would drive the
macroeconomic recovery. “If we assume the mortgage market
turns over about 10 percent per year — or $350 billion per year
36 PERE | 2010 AwArds & AnnuAl review
of need — and banks are actively reducing their balance sheets,
then this is going to put pressure on what we see by way of opportunities
going forward,” he said.
For all that, PERE’s four roundtablers insisted the US was
still one of the best places globally for real estate opportunities.
“For the first time in a long time, investors are looking at the
US markets as being attractive,” Clairvue’s Giller said. “In the
past cycle, the US had gotten so pricey that those who manage
capital were searching for alternatives quite far afield, including
some of the emerging markets.”
Casal agreed, saying today’s pricing points were “much
more attractive than they were in the past”. But, he added, the
macro view should still be cautious. “We think this is a grinding
recovery. The consumer is still in a deleveraging mode, and
the financial sector is as well. There are good entry points and
yield spreads are strong, but job formation is very weak, which
means [real estate] absorption is going to be weak. The good
news is that there isn’t much new supply in the pipeline, but you
do need demand in order to grow the rents.”
The current attractiveness of the US, however, wasn’t just
limited to the current cycle, said Lindsay. “I think the US is always
going to be an attractive market in all cycles. If you compare
it to a lot of other markets, we are much more transparent
and easily understandable.”
But, just as in assessing the wider macroeconomic landscape,
McDermott said caution was still needed, not least owing to
the wave of equity targeting core assets in prime markets such
as New York and Washington DC. “What we are observing is
2007 capital markets executions against 2010 real estate fundamentals,
so I don’t want us to get too far ahead of ourselves,”
he said.

In June, Morgan Stanley Real Estate Investing (MSREI) closed
its latest global fund, Morgan Stanley Real Estate Fund Global
VII, on $4.7 billion. As the largest private real estate vehicle to
close following the collapse of Lehman Brothers, it cemented
the firm’s position as the second largest private equity real
estate firm in the world, according to PERE’s ranking of the
industry, and equipped the platform with an arsenal of dry
powder most firms could only dream of.
Yet, despite that, MSREI was not in a triumphant, self-congratulatory
mode. After being publicly chastised for investing
tens of billions of dollars at the height of the market in 2006
and 2007 – something that prompted hefty write-downs for
its 2006 and early 2008 vintage funds – MSREI was treading
extremely cautiously as it looked to the future.
Jay Mantz, then vice-chairman and chief investment officer
who has since left the group, accepted that the performance of
two funds, MSREF Fund V US and MSREF Fund VI International,
was below par. “People are allowed to be disappointed,
and they are allowed to be vocal about it,” he said at the time.
Of course, the attention afforded MSREI was – and still is –
due to the fact the firm has been around so long and is such an
establishment name on the private equity real estate circuit.
The Morgan Stanley real estate franchise started in 1969, with
the MSREF fund series created in 1991. During that time, MS-
REI has raised 10 opportunistic funds totalling more than $25
billion in commitments, in addition to separate accounts and
seven core and special situation funds.
In growing out the business in terms of geographies and
products, Mantz said MSREI achieved top quartile performance
and benefitted from having a globally diverse portfolio.
“We made some big strategic decisions when we went interna-
BluePrint | AMeriCAs
Thomas, Mantz, Klopp: insight into MSREI
MSREI’s mission
in an excerpt from one of our Blueprint interviews, Msrei discussed the challenges it
faced during the credit crisis and how it was refocusing attention on the future
tional, first to Europe and then to Asia,” he added.
However, Mantz admitted that MSREI’s timing was off in
its most recent vintage funds. “We bought at the top of the
market,” he said. “We did not anticipate the level of dislocation
and repricing that would occur in a very short timeframe.”
In looking to the future, MSREI highlighted its new appointments,
including former Capital Trust founder John
Klopp and ex-Pirelli Real Estate chief investment officer and
former co-head of MSREI Europe Olivier de Poulpiquet.
Klopp and de Poulpiquet were promoted to co-chief executive
officers and co-chief investment officers in September.
At the time of the interview, Klopp, then head of MSREI
Americas, accepted there was a perception that MSREI was
“not in business for a while”. But he stressed the firm had
been “actively getting back into the marketplace and putting
our name out there as ready, willing and able to make new
investments”.
When it came to the US, Klopp said “the entry point for
opportunities … is to get to the equity through the debt. That
can take a variety of different forms, whether it’s partnering
with existing borrowers to recapitalise projects or portfolios
or buying the debt and taking control of a property if that’s
what makes the most sense. But everything we are doing today
starts with debt.”
Klopp noted that the US real estate markets in 2010 had
“only seen the tip of the iceberg in terms of opportunities and,
for [MSREF Global VII], right now the most active marketplace
is the US. Over-leveraging is very widespread, the market
is just beginning to turn in terms of fundamentals and the
logjam is beginning to break. We believe, as a team, the US
will be very fertile turf for investing.”
2010 AwArds & AnnuAl review | PERE 37

PERE FORuM | nEW YORK
Nori Gerardo Lietz
(L to R) Rob Stern, Howard Margolis, Steve Coyle, Stephen Tomlinson
Mark Burton
Don’t be sheep
lPs were urged not to blindly follow the surge of capital
chasing us core assets for fear of getting ‘fleeced’
Protecting yourself after a fall is basic human instinct, but LPs attending the
PERE Forum: New York in October were warned against following the capital
surging towards core US real estate for fear of only one possible outcome.
“If you act like sheep, expect to get fleeced,” warned Nori Gerardo Lietz, chief
strategist of private real estate at secondaries firm Partners Group. The advice
was just one of many cautionary tales against the rush of capital into core.
Mark Burton, a member of the real estate advisory board of Norges Bank Investment
Management, which manages investments on behalf of Norway’s sovereign
wealth fund, insisted it was time for LPs to stand up and be counted. “If the
[private equity real estate] fund model is going to continue in any shape, size or
form, LPs need to have a sensible say and have people representing them who are
enabled to make decisions at that meeting and are prepared to speak out,” he said.
When it came to actual investment models, though, it was Colony Capital
chairman Thomas Barrack Jr. who warned that the fund structure would come
under attack. “The co-investing club will become, for the bigger guys, the better
investment vehicle for a while,” he said.
Thomas Barrack Jr. (L to R) Cia Buckley, Craig Solomon, Paul Fox, Jeffrey Krasnoff, Gary Koster

AnnuAL REVIEW | EuROPE

AnnuAl review | euroZone
The hunting party
opportunity funds in europe went ‘sharp shooting’ for investments in a hostile
environment
By robin Marriott
At the beginning of 2010, the US was
the world’s most attractive distressed
real estate market and Asia was a strong
growth opportunity. Europe was neither
of those things.
Several issues seemed to conspire
against Europe becoming a hot-bed of
private equity real estate activity. First,
there was the sovereign debt crisis that
enveloped Greece, took hold of Ireland
and threatened to pistol-whip Spain and
Portugal. Second, Europe’s banks still were not being, well,
American about their real estate loans and refused for the
most part to take write-downs. Adding to the grief, banks
weren’t really lending all that much either.
Lastly, the European Union, the European Commission
and, in some cases, individual nations decided to send down
a regulatory plague of biblical proportions upon the heads
of those managing real estate funds. Poor CFOs gradually
got swamped with pending regulatory reforms on everything
from the taxation of carry
to marketing funds and hedging
against interest rate movements.
Then, in a cruel twist of fate,
yields continued to fall for prime
real estate in capital cities because
so much demand existed for safe
assets. That made the marketplace
too crowded for opportunity
funds in locations such as
London, Paris and Frankfurt. All this came at a time when
Asia – China in particular – seemed to be on a strong growth
trajectory, while the US offered large bankruptcy and Federal
Deposit Insurance Corp-sponsored deals.
Yes, 2010 as it unfolded seemed to be a tough time to be
an opportunity fund operating in Europe. And yet, the feeling
on the ground was that things actually were beginning
to look up.
Indeed, real interest rates stayed low, so the cost of financing
theoretically was cheap. Inflation remained high,
reinforcing investors’ desire to buy property as an inflation
hedge. In addition, the euro gathered strength towards the
end of the year.
During those months, opportunity funds took to ‘sharp
shooting’ investments in difficult countries. They even were
finding investment opportunities in Spain, where sale-
40 PERE | 2010 AwArds & AnnuAl review
The excitement of industry
consolidation, some precision
opportunistic investing and some
signs that banks were beginning
to sell some portfolios made it feel
like 2010 wasn’t so bad after all
leaseback deals with Spanish savings banks and corporates
generated plenty of buying opportunity. Some brave souls
bought land to develop shopping centres.
Germany and the Nordic countries actually were showing
encouraging GDP growth, so both those parts of Europe
saw capital returning. And even though rents seemed soft,
Paris’ business district and London’s financial epicenter did
see deals by opportunity funds.
Even assets outside of capital cities witnessed opportunistic
money coming in. A recent example would be The
Blackstone Group, reported to be the preferred bidder to buy
Chiswick Park business park near central London for £480
million (€573 million; $744 million). The deal would be the
New York firm’s first UK real estate acquisition in around
15 months.
While opportunity funds were picking off deals despite
the challenges, there was wider industry consolidation going
on all around them. By the time the annual Munich property
show, EXPO Real, swung round in October, there had
been plenty of M&A to mention.
Just before the show, London-
based Invista Real Estate Investment
Management said it would
either be sold or become the subject
of a management buyout. On
day one of the show, European
private equity real estate mainstay
Europa Capital Partners
announced a sale of a majority
interest to Rockefeller Group International,
the New York-based real estate investment firm.
The day after the EXPO show, the real estate fund management
division of boutique London bank Close Brothers was
sold to Alpha Real Capital.
Other corporate activity included HSBC’s decision to spin
out its real estate and infrastructure fund management business,
the MBO of Bank of American Merrill Lynch’s European
platform and the early stage notion of a management
buyout of Valad Group in Europe. There were more besides,
but the granddaddy of them all remained the “strategic review”
that ING Group was conducting for ING Real Estate
Investment Management.
By the end of the year, the excitement of industry consolidation,
some precision opportunistic investing and some
signs that banks were beginning to sell some portfolios
made it feel like 2010 wasn’t so bad after all.

For further information please contact:
London (t: +44 20 7006 1000)
Nick Benson nick.benson@cliffordchance.com
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New York (t: +1 212 878 8000)
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Roger Singer roger.singer@cliffordchance.com
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Clifford Chance provides comprehensive, commercially-focused
legal advice to both sponsors and investors on the structuring,
marketing, establishment and operation of private equity real estate
funds. Working as international counsel we have helped many of the
leading global names in private equity real estate raise their funds with
institutional investors located across Asia, the Americas, Europe and
the Middle East. Our international network of specialist private funds
lawyers enables us to provide a combination of global market
knowledge and local legal, regulatory and tax expertise in key
jurisdictions. Our fundraising practice is also supported by a
leading real estate transactions group.
We are delighted that the quality of our unique service to real estate
fund managers has been recognised, again, by PERE:
� European Law Firm of the Year 2010 (Fund Formation)
� European Law Firm of the Year 2010 (Transactions)
� Asian Law Firm of the Year 2010 (Fund Formation)
Clifford Chance LLP
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CoMMentAries | euroPe
A never-ending struggle
excerpts from the best of PERE’s ‘eurozone’ columns show GPs and lPs trying to reach
an understanding while battling it out over roles and fees
Lenders of first resort
Alternative property lenders began stepping
in to try to plug the financing gap, but they
ultimately would prove insufficient to satisfy funds
looking for a return to debt-fuelled acquisitions
Watching the horror story of Ireland’s bailout unfolding last
year reminded investors that a whole chunk of property lending
had long since vanished from the European commercial
property markets.
With a whole debt supply chain missing and fears of further
bailouts of weaker countries to come, it was all the more amazing
to hear that, in the US, there was talk of a property lending
bubble emerging.
In Europe, however, there was a feeling that many traditional
lending banks had simply continued to be selective in their
lending. No wonder there was talk of the growing importance
of alternative lenders and how opportunity funds were working
hard to scout out potential financing from non-traditional
sources such as insurers.
AXA Real Estate, which set up a lending business in 2005 and
then took a break, stepped up to the plate by investing in loans
with five-, six- or seven-year maturities. In July, it backed banks
that financed The Carlyle Group’s £671 million (€803 million;
$1.02 billion) purchase of a distressed London property portfolio.
At the time, AXA told PERE that it saw traditional lenders
restricted by legacy issues and with no capacity to deal with the
wave of refinancings coming due.
Isabelle Scemama, head of commercial real estate loans and
corporate finance at AXA Real Estate, said: “I am convinced we
will see insurance companies representing a significant part of
the market, like they already do in the US.” But she agreed it is
fairly clear that insurance companies (combined with other alternative
lending sources) will not be the whole answer, just part
of a solution to plugging some of the real estate financing gap.
Fund of funds vs. consultants
Multi-managers privately discussed an issue they
rarely raise in public for fear of losing business -
consultants who say they can do a better job
In good times, fund of funds managers wouldn’t be peppery
about consultants, often meeting them in search of capital commitments
and their capacity as asset allocators. In 2010, however,
there were complaints about consultants’ ability to actually
divert business away from the multi-manager space.
The source of discord related to two issues. One was the need
42 PERE | 2010 AwArds & AnnuAl review
to provide consultants with detailed strategies about fund investments
in the hope of securing a commitment from the consultant’s
clients. If a commitment wasn’t forthcoming, fund of
funds managers were feeling they had offered up their best ideas,
which could then be used by those same consultants to provide
multi-manager advice about the GP in question to clients.
The second – and perhaps more controversial – issue was
about consultants that also sponsored their own fund of funds,
or acted as investment advisers to third-party multi-manager
programmes.
The issue was really brought into focus when The Townsend
Group in London hired Nick Cooper from ING Real Estate Select
to grow its multi-manager business in Europe and Asia.
This was seen as a threat that fund of funds managers could
do without.
One fund of funds sponsor, who spoke to PERE on condition
of anonymity, said some generalist consultants were positioning
themselves as a “de facto fund of funds”, claiming they could
select underlying funds as well as any other multi-manager.
“In both cases, their clients are deprived from access to a much
larger talent pool,” he added.
The most interesting development since then came in December
when the California Public Employees’ Retirement
System, the largest public pension in the US, said it would
consider banning investment consultants from working with
the pension if they serve as money managers for the pension’s
investments as well.
The call to ban consultants-cum-money managers was one
of numerous recommendations CalPERS received from the law
firm of Steptoe & Johnson after a “special review” launched last
year of placement fees paid by CalPERS’ investment managers.
Mismatch in paradise
the laid-back town of Cannes on the Cote
d’Azur jarred with wary investors and fund
managers attending MiPiM
At March’s MIPIM property show in Cannes, France, the Gucci-
and Armani-clad natives were going about their business
in a carefree manner, in contrast to the dazed look of be-suited
property folk. One participant at MIPIM put it this way: “MIP-
IM this year is like the day after a hangover.”
Part of the confusion was due to investors sending out conflicting
messages according to their particular sub-set of the
investor universe, making it difficult for fund managers to act
accordingly.
Take the UK life or pension fund investor, for example. Many
British pension funds wanted to increase their exposure to over-

seas real estate and had been largely choosing non-listed vehicles
to do it through. When it came to real estate in their own backyard,
though, the same pension managers were thinking about
going direct or through joint ventures over the next few years.
In contrast, some large continental European investors in
unlisted property funds were retrenching, rather than pursuing
pan-European fund investments. Having suffered as a result of
diversification, lack of control and poor performance, investors
such as the Italian insurance company Generali were scaling
back on commitments to the unlisted sector.
Sovereign wealth funds – a real presence in European unlisted
funds – also were said to be looking to buy property more
directly and in club structures with like-minded investors.
All of this is before one looked at another investor sub-set
such as the high- and ultra-high-net-worth individuals. This
type of investor, also at MIPIM, is a fast moving and more fickle
animal than pension funds and insurance companies, not being
hampered with having to meet liabilities.
Against this backdrop, there was a vast number of different
GPs from different parts of the globe all wanting to attract equity
commitments from investors. No wonder the delegates and
residents of Cannes were strange bedfellows.
A matter of trust and expenses
Management fees were a hot topic in europe
just as they were in the us and elsewhere
Every now and again, an elite club of European private equity
real estate fund managers meets informally in central London
to chew the fat. What is discussed behind closed doors reflects
the big issues of the day, and one item that certainly was on
the agenda in 2010 was just how much GPs should push back
against LPs on the issue of fees.
It was a crucial topic because, as stated in a report by INREV,
the management of management fees and terms suggested
many investors increasingly were in favour of upending the traditional
fee structure in European funds. Specifically, LPs wanted
change on both the management fee and performance fee.
There are many aspects of a private equity real estate fund’s
fee structure to consider. But on management fees specifically,
the problem investors identified was in the way they had lurched
away from being a way to pay overheads towards becoming a
profit centre in their own right.
That is rightly to be stamped upon. However, there is a danger
in shifting too far on the issue.
The case against low-balling the management fee is that, in
certain circumstances, putting a premium on how low you can
go on the management fee might persuade some managers to
cut corners in managing optimally. Indeed, this might be the
case if the investors come to expect a report on total expense
ratio from funds. INREV’s study says total expense ratio currently
is reported to investors by just 26 percent of funds that
replied to INREV.
The concept of working out and relaying how much money is
not being spent on investment has its benefits in terms of being
a worthwhile measure. But the total expense ratio doesn’t tell
an investor everything it needs to know about the value of the
management fee spend.
The issue comes down to trust. LPs need to trust that a manager
is not looking to make money out of a management fee,
rather that it wants to spend for the greater good of the investor
base. The trouble is that the bond of trust has been broken
thanks to the mistakes made by many during the downturn.
Spotlight on spin-outs
A study suggested 43 percent of private equity
GPs thought incentives were never greater to
spin out, but in reality it was not that easy
It is hard to gather cold hard facts, as opposed to anecdotal evidence,
about how many GPs are contemplating spinning out. For
example, one cannot look up an index to get the number in order
to gauge its prevalence. So a study by accounting firm Grant
Thornton certainly was welcome because at least it threw a spotlight
on the thinking among UK GPs in mainstream private equity,
which in turn is a rough guide for its cousins in real estate.
In its UK private equity second quarter index, Grant Thornton
put the following statement to GPs: “Incentives have never
been greater for executives to leave their firms and set up a new
fund.” On one level, the results were inconclusive: fifty-seven
percent of GPs disagreed with the statement, while 43 percent
agreed. Nevertheless, four out of 10 GPs did agree, and that’s
quite a lot. It makes one wonder if we are not going to see a lot of
spinouts in the next couple of years.
Just as in mainstream private equity, plenty of real estate
funds have been caught out in terms of spending capital at the
height of the market. The issue they face now is how they can
work through those assets and reward themselves and their
staff.
Adam Turner, head of executive search firm Odgers Berndston’s
private equity practice in London, told PERE’s sister
magazine Private Equity International that he was working on
two mandates involving teams spinning out and setting up
first-time funds. “A number of guys within the general partnerships
are starting to look at each other and ask, ‘Am I going
to have to work twice as hard, for twice as long to earn half as
much money?’”
Clearly, there are forces at work that can precipitate spinning
out. In the case of DLJ Real Estate Capital Partners, some
sources said it’s because parent company Credit Suisse seemed
to want to exit the arena. Lehman Brothers also was a severe
case of needing to do something with its platform.
Of course, there are plenty of other factors that make such a
thing tricky and time consuming. Issues pertaining to the GP
and LP stake, third-party investors, lenders and joint venture
partners can complicate transactions. Indeed, making a decision
about one’s future is hard at the best of times, but it is especially
difficult today.
2010 AwArds & AnnuAl review | PERE 43

toP stories | euroPe
Building blocks
excerpts from the 10 most-read stories for europe track mergers, new businesses
and a plethora of hires
1
Going once, going twice…
the ongoing saga of the sale of inG
real estate investment Management
intrigued readers throughout the year
with news on those firms in the running
Industry consolidation stories were hot in 2010. In Europe,
most of the excitement came from the sale of ING Real Estate
Investment Management (REIM).
The starting gun in this saga was fired around May last year
when it became clear that ING REIM’s parent company, ING
Group, had appointed investment bank Morgan Stanley to
advise on a potential sale of the platform. Cue lots of followup
articles by PERE and mainstream press about who was in
the running. Among those citied in reports were US private
equity companies such as Kohlberg Kravis Roberts and TPG
Capital.
This information in itself was tantalizing. Could a buyout
firm suddenly become one the largest managers of real estate
funds in the world? The industry had certainly been waiting
for such a move as both aforementioned firms had been looking
to expand in the area. Indeed, Dallas-based TPG had been
executing deals in the US and struck up a joint venture to buy
assets in the UK and Ireland.
The potential sale of ING REIM also flushed out firms that
hadn’t previously come onto the radar screen of many involved
in private equity real estate. For example, Ares Capital
Management, which is a US alternative asset manager, was
said at one stage to be among the bidders.
Alas for those new-entrant junkies, it appears that no such
dark horse is going to swallow ING REIM. Reports in Febru-
44 PERE | 2010 AwArds & AnnuAl review
ING HQ, Netherlands: centre of attention
ary said the remaining bidder in the race was Los Angelesbased
CB Richard Ellis, which owns CBRE Investors, and at
press time an announcement was imminent.
So, it will be a large established player in the real estate
investment management industry that will join with ING
REIM. With more than $100 billion of assets under management,
the combination of ING REIM and CBRE Investors
would create a global super hero – probably the largest real
estate investment management platform on the planet.
2
new old Morgan Stanley man
olivier de Poulpiquet returned to
Morgan stanley real estate investing
to head up its business in europe
Morgan Stanley Real Estate Investing,
the real estate investment management
division of Morgan Stanley,
re-hired Olivier de Poulpiquet as European
head of the platform.
The return of de Poulpiquet in
April was a significant development
as Morgan Stanley watchers at the
time were wondering how the Wall
Street bank would react to some pretty
hefty challenges at the business.
One of those challenges emerged
around the same time as a fund managed
by Morgan Stanley handed back
the keys to a €2.1 billion real estate
de Poulpiquet: back to
tackle challenges
portfolio it acquired in Germany in 2007. The US bank bought
the 28-property portfolio using a €1.9 billion loan from Royal
Bank of Scotland.
However, the appointment of de Poulpiquet also became a
kind of line in the sand, or so Morgan Stanley hoped. By allowing
him to take on the same role he held when he left the
bank to join Pirelli Real Estate in 2003, it was taking on someone
who could not be blamed for past mistakes.
The hiring was not only practical but nostalgic as de Poulpiquet
began his career at Morgan Stanley’s investment banking
division back in 1994. He joined the bank’s real estate
investing platform two years later and eventually became cohead
of European real estate investing.
The postscript was even heartwarming, as de Poulpiquet
subsequently was elevated further amid a reshuffle of the
hierarchy. In September, he took over the reins of the global
business alongside John Klopp when Jay Mantz stepped back
from day-to-day operations. De Poulpiquet is now co-chief
executive officer and co-chief investment officer.

3Throwing down
the gauntlet
the townsend Group recruited
nick Cooper, the former head
of inG’s fund of funds business
to boost its multi-manager operation
The Townsend Group stirred up a veritable viper’s
nest with a particularly eye-catching hire in May.
In a move that threw down the gauntlet to specialist
European fund of funds managers and
more generalist investment consultants, the US
firm took on Nick Cooper, the former head of
ING Real Estate Select, which is the Dutch bank’s
global multi-manager business.
The hiring was a
move – and one that
many fund of funds
saw as an aggressive
one – to help grow
Townsend’s own
multi-manager capabilities
in the European
and Asian
markets.
At the time there
were a great many
murmurings and
implied criticisms
Cooper: stirring up a viper’s nest
about consultants
that also managed
third-party funds.
Privately, fund of funds managers were grumbling
that consultants – not necessarily Townsend, but
others – were diverting business away from them.
While at ING Real Estate Select, Cooper managed
£4 billion (€4.6 billion; $6 billion) for more
than 150 investors in non-listed real estate funds
worldwide and developed Osiris, the UK’s largest
property fund of funds – so he was no small catch.
Adam Calman, principal for The Townsend
Group in London, said at the time: “Nick Cooper’s
extensive experience in the industry and high
reputational standing with institutional investors
will be a real boost for The Townsend Group’s rapidly
expanding investment management business
in Europe and Asia.”
Calman added: “Real estate markets globally
are offering the best investment opportunities in
a generation, but only to those who have the expertise
and structural support to seek out those
opportunities and underwrite the risks. We believe
with the addition of Nick that Townsend is
very well positioned to be an industry leader in
identifying the best real estate investments for our
clients around the globe.”
Townsend went on to make more hires, while
ING REIM Select continued to lose people.
Best of the rest on
PEREnews.com [Europe] in 2010
4
CRuZ MISSILE
Pedro Aznar, head of Warburg Pincus’ European real estate activities,
left to join the new alternatives firm set up by Zoe Cruz, the former copresident
of Morgan Stanley. Aznar, who was based in Warburg’s London
office, resigned to become global head of real estate assets at Voras Capital
Management.
5
nORWAY’S WISE MEn
Norway’s $300 billion sovereign wealth fund, the Norwegian
Government Pension Fund Global, assembled a cast of advisors to help it
begin investing up to five percent of its assets in global property. Those on the
real estate advisory board included Mark Burton, former chief investment
officer for real estate of the Abu Dhabi Investment Authority, and Andrew
Strang, former chairman of Threadneedle Property Investments.
6
REECH ADVAnTAGE
Reech CBRE, the joint venture between CB Richard Ellis and hedge
fund business Reech Aim, said it was launching a fund investing in REIT
securities. Managed by Martin Allen, former head of pan-European
property equity analysis at Morgan Stanley, the timing was notable given
that a number of real estate hedge funds had shut since the credit crunch.
7
PATROn’S HEALTHY START
Following a trend toward specialisation, London-based Patron
Capital decided it would launch a new business line targeting healthcare
properties. The firm hired Tim Street as a senior advisor to help it execute
its strategy. Street previously worked at Australia’s Macquarie Capital
Advisors as managing director, advising on healthcare deals.
8
HSBC’S SPInOuT
HSBC said it was spinning off HSBC Specialist Investments, its global
infrastructure and real estate private equity fund management business.
The bank revealed it would sell a majority stake but retain a 19.9 percent
holding in the unit, which manages some $4 billion of assets. The move
was seen as part of a strategy to focus on core activities but with one eye
on regulatory changes affecting the way banks can operate private equitystyle
units.
9
FunDRAISER GOES SOLO
Rachel Tan, the former head of capital-raising in Europe for
Australia’s Macquarie Capital Advisors, set up her own real estate funds
management platform. Tan left Macquarie in September 2009 but returned
to the market in 2010 with Tan-EU Capital, with offices in London and
Hong Kong.
10
ORF STICKS WITH APOLLO
Apollo Global Management made private equity real estate
veteran Roger Orf its European property head following the takeover of
Citi Property Investors (CPI). Orf, who was president and chief executive
officer at CPI, rekindled the professional relationship he had with Joseph
Azrack, who was global head of CPI until he left to join Apollo in 2008.
2010 AwArds & AnnuAl review | PERE 45

oundtABles | euroPe
Euro survivors
in an excerpt from PERE’s european roundtable in February, the participants took a
dignified stance of not pointing the finger of blame despite a huge amount of flux
Without exception, the participants in February’s European
roundtable and their respective organisations endured transformational
events in the wake of the financial crisis.
Harin Thaker saw his organisation replace its chief executive,
receive billions of state aid, get nationalized and change
its name from Hypo Real Estate to Deutsche Pfandbriefbank.
The chief executive officer of real estate international also saw
his firm reduce the number of overseas branches and create a
separate “bad bank” for housing up to €210 billion in distressed
real estate assets.
Edmund Craston, for his part, lost his job as head of real estate
investment banking for the EMEA region at Lehman Brothers
when the bank collapsed into bankruptcy in September 2008.
Subsequently, he became partner and managing director of one
of the most talked-about pan-European property fund managers
around: Rockspring Property Investment Managers.
Meanwhile, Brendan O’Regan, responsible for Ireland’s National
Pension Reserve Fund property portfolio, was coming
from a country where the banking system had huge issues of
its own. Ireland subsequently needed a bailout as its bank recapitalization
plan failed and borrowing costs continued to rise.
At the heart of the discussion was the relationship between
fund managers and their investors. O’Regan, summed up the
grown-up approach that many LPs subsequently would take
and many GPs subsequently would call for: “If managers ad-
hered to the fund strategy that was articulated at the time investors
entered the fund and deployed the capital in line with this
strategy, then LPs should not rush to blame GPs if that fund
has not performed well,” he said. Only in cases where the GP
deviated from the strategy should the finger be pointed at them.
O’Regan also put his finger on what proved to be a big theme
in 2010 when he presciently said investors were once again focused
on the benefits that real estate could offer, such as diversification
and attractive risk-adjusted returns underpinned by
income. These attractions can now be found at the lower riskreturn
end of the scale by investing in core and core-plus.
Safe haven
in an excerpt from PERE’s nordic roundtable in June, the region proved to be the
antithesis to the PiiGs
Helfrich, Bergman, Vanhanen and Åkerbäck: local liquidity
As the participants in PERE’s Nordic roundtable in June pointed
out, if one took the best parts of Sweden, Norway, Denmark and
Finland (forget Iceland) and threw them together, one would
have the antithesis to the PIIGS .
This is because the region had not witnessed a dramatic national
budget deficit problem or the major austerity drives seen
46 PERE | 2010 AwArds & AnnuAl review
O’Regan, Craston, Jarvis and Thaker: just getting on with it
in Portugal, Italy, Ireland, Greece and Spain. Instead, robust
GDP growth and general stability was helping investors to view
the region as a safe haven.
According to Peter Helfrich, managing director of the Nordics
at ING Real Estate Investment Management, the positive
macro and social economic factors experienced in the
Nordics actually was helping create liquidity in the property
market. Although bidders for properties had not returned to
anywhere near the levels seen before the financial crisis, there
were still more transactions at that time than during the previous
two years.
Pertti Vanhanen, who for the past two years had been leading
Aberdeen Asset Management’s €8.2 billion Nordic property
business and is now head of direct property for the whole of
Europe, captured the mood best. “Companies really believe in
themselves more than they did 12 months ago. They are starting
to make decisions,” he said. “It is better than 12 months ago
when everything stopped, including imports and exports. That
was like the ice age.”

Political football
An excerpt from PERE’s uK roundtable in May found participants fearing the
consequences of a hung parliament, which is precisely what happened
Politics was on the minds of the participants in PERE’s UK
Roundtable, which took place in May as the country was set to
go to the polls to vote on the next government.
The common fear was the continuation of a stagnating economy
by a hung parliament, whereby no one party could govern
outright as it lacks an overall majority vote. As things turned
out, their worst fears were confirmed as a collation was formed
between a Conservative party and the Liberal Democrats.
“A hung parliament is what we don’t want,” said Paul White,
managing director of Frogmore Partners. “All we’ll see is another
election within 12 months and, in between that, politicians
will try to score points off of one another. This will be economically
unhelpful to us.”
As the old saying goes, every cloud has a silver lining, and
MGPA’s Alex Jeffrey, who is now chief investment officer of the
firm, already was thinking about opportunities stemming from
a government in need of producing capital receipts to reduce its
debt. “Whoever wins will be downsizing the government’s real
estate footprint, whether it was occupational space or ownership,”
he said. “The SW1 estate (the government’s most prominent
London postal code) will be reduced in size, there will be
decanting of staff and the sale of assets.”
As it happens, in February of this year the government ap-
White, Jeffrey and Hodcroft: playing politics
peared to head down such a path with the appointment of advisers
by the Government Property Unit to help it establish property
vehicles to own and manage up to 65 million square feet of
government offices in London and Bristol.
Such interest in the government wasn’t the result of no viable
assets to buy, rather a lingering bid-ask mismatch. “We have
seen a pipeline of £30 billion a year since 2006,” White said.
“This year, I think we are seeing between £500 million and £600
million of assets a week, so we can’t say we aren’t seeing stock.
We are just not seeing stock at a price we want to pay.”
The resurgence of Germany
in an excerpt from PERE’s German roundtable in november, five professionals discussed
the renaissance of the German economy and the state of its real estate markets
Maybe it is because German
nationals are conservative
by nature or because
they have survived
economic shocks before
or because they are simply
wary of past mistakes,
but local real estate players
were restrained over
the country’s remarkable
economic strength when
PERE caught up with
them in November.
There was plenty of
OpernTurm, Frankfurt: sign of the times reason for cheer as the
German Council of Economic
Experts had just announced that the German economy
was showing 3.7 percent growth in 2010 and was forecasting
2.2 percent growth for 2011. Still, Matthias Hünlein of Tishman
Speyer, Ralf Kind of Barclays Capital, Michael Schleich of
GREAT German Real Estate Advisory Team, Collin Schmitz-
Valckenberg of Orlando Real Estate and Ralph Winter of Corestate
Capital refused to get carried away.
As Hünlein pointed out, part of the cautious German psyche
has to do with a focus on savings and not getting too carried
away by indicators. “Germany has gone through a number of
difficult situations where people had to rebuild wealth,” he noted.
Instead, the participants were focused on a raft of issues from
local investor demand for core assets to the availability of bank
finance to how Germany’s small public real estate sector is ripe
for change. In addition, the current ‘play’ is more about investing
in special situations, where one has to “work like hell”.
Although investors were finding deals that made sense in the
new economic environment, the participants said what would
happen next in Germany was just as likely to be influenced by
global investors as by locals ones. As evidence, they pointed to
the acquisition of the Sony Centre in Berlin by South Korea’s
National Pension Service for around €570 million in May.
Furthermore, just a few weeks after the roundtable was held,
the sale of the OpernTurm in Frankfurt was announced. It was
sold to a joint venture between JP Morgan Asset Management
and the Government of Singapore Investment Corporation.
2010 AwArds & AnnuAl review | PERE 47

BluePrint | euroPe
Arnold and Taljaard: no ordinary business
Continental stars
in an excerpt from one of our Blueprint interviews, the european arm of starwood
Capital Group discussed its return to investment mode
In April, Starwood Capital Group repeated its strategy of raising
a hospitality fund alongside a global opportunity fund. Armed
with nearly $2.8 billion of fresh equity to invest, Sean Arnold,
senior vice president and head of European acquisitions, and
Desmond Taljaard, chief operating officer and head of asset
management, explained how the firm’s European operation was
back to acquisition mode, having just made its first investments
in three years.
Arnold and Taljaard were careful to note that, although Starwood
has close historical ties to the hospitality sector, the firm
did more than just buy hotels. Indeed, the first deal to mark the
firm’s European comeback was the acquisition of corporate debt
backed by a portfolio of prime pan-European commercial assets.
“Really, we are not asset-class specific or geography-specific,”
said Arnold. “We are simply looking for what we think is the
most interesting risk/reward profile.”
That said, Starwood’s follow-up deal was straight out of
founder Barry Sternlicht’s hospitality playbook. The firm acquired
Dutch hotel group Golden Tulip, which was struggling
in early 2009 because of over-expansion and by March had announced
plans to go into voluntary receivership, taking with it
250 franchised hotels.
The Golden Tulip deal was attractive to Starwood as it was
looking to grow its Société du Louvre’s hotel business outside of
Europe. “All of a sudden, it went from quite an interesting idea
to a potentially strategic change in terms of driving value for
our Louvre hotels,” said Taljaard. The fact that it was mainly a
franchise business meant it also was cheaper to buy.
The third deal Starwood completed in Europe was the purchase
of City Tower at 40 Basinghall Street in London for
around £30 million (€34 million; $46 million). There also could
48 PERE | 2010 AwArds & AnnuAl review
have been a fourth deal in Europe after the firm worked hard to
acquire a performing loan backed by three million square feet of
commercial property in Germany. That deal progressed all the
way to being signed off by Starwood’s investment committee,
but ultimately it broke down in the due diligence stage.
Three out of four isn’t bad, though. Furthermore, within a few
weeks of the interview, Starwood bought the Cumberland Hotel
from Royal Bank of Scotland for £215 million ($321 million).
That deal was done in joint venture with London & Regional. At
the time, it was described by CB Richard Ellis as the largest hotel
investment in Europe in more than a year.
No wonder Arnold and Taljaard looked pleased with the
progress they were making. They said the firm had invested
around $500 million of equity in 2009 from its private equity
funds, with Europe making up just under 20 percent of the total.
There were two interesting things to note about that statistic.
First, for the prior three years, Europe had accounted for precisely
zero in terms of investment. The other point was that the
other 80 percent was invested in the US, where Starwood was
finding some compelling opportunities. Europe therefore was
Starwood’s only investment region outside its home territory.
Looking forward, the pair hoped that the market would continue
to spew out opportunities. “We still think that, by and
large, the opportunities will materialise in the debt. It is going
to take some time to materialise, but we expect there to be a fair
amount of things to do,” Arnold said.
For Starwood, patience is a virtue, and Arnold and Taljaard
are willing to wait for something compelling. “We have looked
at pub deals, cinema deals, healthcare and all the traditional
food groups,” Arnold said. “With the exception of development,
we are excited about it.”

(L to R) Bernard Phang and Peter Pereira Gray
The 2010 investment model
with fundraising as difficult as it was in 2009, picking
the correct investment vehicle was the topic du jour
at PERE’s annual conference in london
As LPs and GPs alike looked to the future, many wondered exactly what real
estate investment structures would work best: traditional commingled funds,
club deals, separate accounts or direct investing. The answer, it turned out, depended
upon who was asked.
Keynote speaker Bruce Flatt, chief executive officer of Brookfield Asset Management,
said the Toronto-based firm’s investment club – the Brookfield Real
Estate Turnaround Consortium – was a product of 2009’s dire fundraising environment.
With many investors “retrenching and worrying about issues they
had in their [existing] funds”, Brookfield decided to “try something different,”
he explained, adding that the opportunities earmarked for the club would “never
fit a [traditional fund].”
Later, in a break from traditional panels, PERE also staged its popular “Big
Debate.” Volker Wiederrich of advisory firm Swisslake and Keith Breslauer of
Patron Capital argued in support of fund investments, while Claus Stenbaek of
Keyhaven Capital Partners and Jos Short of Internos Real Estate opposed them.
PERE FORuM | EuROPE
Bruce Flatt
Ted Leary
Claus Stenbaek Volker Wiederrich

PERE FORuM | FRAnKFuRT
Mark Newman
(L to R) Laurent Luccioni, Will Rowson, Ralph Winter
(L to R) Baerbel Schomberg and Michael Morgenroth
Brothers in arms
inrev’s chairman issued a battle cry to Forum
attendees over solvency ii
Michael Morgenroth, chairman of the European Association for Investors in
Non-listed Real Estate Vehicles, demanded action against Europe´s Solvency II
regulations during PERE’s first-ever forum in Frankfurt. Making his plea from
the stage, he said the incoming European regulations would limit insurance companies
– and potentially pension funds – from making investments in real estate.
“Insurance companies and pension funds will be reluctant to invest in real
estate next year because of the uncertainty,” Morgenroth warned, noting that all
real estate in any European location would attract a 25 percent capital charge.
The points he made stunned some delegates who were unaware of the potential
impact the new rules could have, particularly on opportunity funds.
In addition, Morgenroth told delegates how BaFin, the German financial supervisory
authority, had introduced fresh draft rules that would place further
restrictions on real estate investing.
Because many of these rules may end up affecting the industry as a whole, Morgenroth
believes they need to be fought by the industry as a whole. “The industry
has to lobby on the European level and fight on the national level,” he said.
Steve Felix (L to R) Jeroen Winkelman and Fredrik Elwing

AnnuAL REVIEW | ASIA

AnnuAl review | AsiAview
Changing of the guard
As investment banks backed out of Asia’s private equity real estate sector, PERE
considers those primed to take their place. By Jonathan Brasse
In Asia, 2010 will be remembered as the
year that Wall Street’s presence diminished
in the region. The departures of
Bank of America Merrill Lynch (BoA
ML), Citi Property Investors (CPI) and
insurance giant American International
Group from the sector were one sign
of that.
A look at Real Capital Analytics’ 2010
figures for the region highlighted another.
According to the research group,
Wall Street rivals Goldman Sachs and Morgan Stanley were
net sellers in the region to the tune of $1.9 billion and $1 billion,
respectively – the fourth and ninth biggest net sellers
last year.
Indeed, while Morgan Stanley Real Estate Investing (MS-
REI) finally achieved a $4.7 billion closing for its seventh
global real estate fund in May, PERE learned in December
that what the firm is willing to buy in the region had been
tempered somewhat. Responding to questions after it closed
Morgan Stanley Capital Korea, the firm revealed that its Asia
investing strategy had been restricted to value-added and
distressed plays in developed markets and growth plays in
emerging markets. That no longer included Korea, it noted.
Perhaps it is strategy evolution, but Morgan Stanley pulled
the curtain down on a 10-year tenure in
the country as a consequence of the shift.
The market will be fascinated to follow the
activities of MSREI’s head of Asia Hoke
Slaughter, its chief executive officer for Japan
Yoshihiko Shigenari and the rest of the
team over the coming year to see if its efforts
are truly redeployed elsewhere.
Meanwhile, at Goldman Sachs, its last
fund was the $2.1 billion Whitehall Street International Real
Estate 2008, and there have been no reports of a follow-up
fund to date. Furthermore, the almost $2 billion of disposed
assets in Asia last year accounted for two-thirds of all its disposals
globally, further demonstrating it hasn’t prioritised the
region ahead of others. For more context, look again to RCA,
which noted that Goldman purchased just two assets in Asia
throughout the whole of the year – a 46,000-square-foot office
in May and a Labi 1 electronics store three months earlier,
both in Japan.
Bank of America Merrill Lynch’s departure from principal
investing in Asia was possibly PERE’s most coveted story of
2010. No quiet backtracks there, rather a complete exit for the
firm. After quelling litigation threats for actions considered
non-fiduciary by the LPs of its Asian Real Estate Opportuni-
52 PERE | 2010 AwArds & AnnuAl review
2010 will be
remembered as the
year that Wall Street’s
presence diminished
in the region
ties Fund via a handsome $650 million settlement, the $2.65
billion fund and its other Asia balance sheet assets now sit
with The Blackstone Group.
That brings us to the players for 2011.
Blackstone had a presence in Asia a couple of years before
assuming control of the 50-person BoA ML platform,
but its offices in Hong Kong, Tokyo and Mumbai had been
pretty quiet until then. The transaction sees it inherit approximately
$8 billion of assets to work through and approximately
25 more limited partners with which to work
on future investment products. Expect to hear more about
platform leaders Chris Heady, Alan Miyasaki and Tuhin
Parikh going forward.
Likewise, Blackstone’s private equity rival Apollo Global
Management. Before picking up Citi Property Investors, Leon
Black’s firm – the real estate activities of which are led by industry
veteran Joseph Azrack – picked up the smaller Holdfast
Capital. Through Holdfast, Apollo acquired the nucleus
of a platform led by Colony Capital’s former Asia head Grant
Kelley as well as a fund in incubation. The adopted fund, originally
focused on Asia’s mature economies including Australia,
Japan and Korea, is expected to hold a closing this year.
On a smaller scale, a host of companies chose 2010 as the
year to graduate from investing on a deal-by-deal basis to trying
their hand at blind pool, commingled vehicles. Examples
included Hong Kong and Singapore investor
Pamfleet Group and Sydney-based LIDIS.
Such activity surely stems from increasing
positive sentiment from investors towards
Asia. According to PERE’s Capital
Watch figures, more than $5 billion was
raised for Asia-specific value-added and opportunity
funds. That was paltry compared
to the $18.97 billion raised in 2008, but up
from 2009 levels. And while most of the world’s largest LPs
are seeking alternatives to traditional commingled funds,
that is not true for all of them.
Look at the National Pension Service of Korea, for example.
It has $1.2 billion of commitments earmarked for higher risk
funds in early 2011, a significant portion of which will go to
Asia. Additionally, there is a world of smaller investors that
have remained faithful to such vehicles.
It could have been the Volcker rule, which will limit principal
investing by US banks, that prompted a changing of the
guard in Asia. More likely, however, it was the dire fortunes
of their 2006, 2007 and 2008 vintage funds that sealed the
demise of those efforts. Regardless, PERE has a new breed to
write about, ensuring that 2011 stands to be a most interesting
year.

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CoMMentAries | AsiA
Land of opportunity
excerpts from the best of PERE’s ‘Asiaview’ columns show that opportunities abounded
for investors throughout the region
Should I stay or should I go?
with invesco as the sole bidder for AiG real
estate’s Asia fund business, investors in its
uninvested fund had a big decision to make
In November, PERE revealed that Invesco had emerged as the
sole bidder for AIG Real Estate’s Asia fund management business.
After a lengthy period on the market, it looked like American
International Group, one of the poster boys of the financial
crisis, was poised to shed a platform with approximately $5 billion
in gross assets.
As with Citi Property Investors’ (CPI) sale to Apollo Global
Management and the transfer of the Asia real estate investment
management business of Bank of America Merrill Lynch (BoA
ML) to The Blackstone Group, AIG’s LPs were central to the deal
going ahead. Specifically, it was the LPs in its AIG Asian Real
Estate Partners II fund, which still had approximately 80 percent
of the $740 million raised in September 2008 uninvested.
Indeed, the LPs had a big decision to make: whether to approve
or block the acquisition. The decision would be crucial
as a successful takeover (and who knows how long that could
take, given that Apollo-CPI took eight months) would see the
approximately 20-strong investor pool, including North American
institutions and sovereign wealth funds, inherit a proposition
they didn’t originally sign up for.
On the one hand, Invesco is a seemingly stable entity with aspirations
to grow meaningfully in Asia and, perhaps more importantly,
has no legacy issues to contend with. For most of the
LPs, however, the investing landscape has changed since they
penned their initial commitments. Some have since reverted
away from blind pool, commingled funds entirely, now favouring
separate accounts.
PERE was still awaiting the LPs’ verdict at press time.
nearly, nearly
the sale of an it park in Mumbai presented
itself as just the medicine india’s exit-starved
institutional market needed
Just how successful the sale of Peepal Tree Properties, a specialpurpose
vehicle that owns a 786,000-square-foot IT park in
Mumbai, will be in curing India’s exit-starved institutional real
estate market will be known shortly.
Srini Wasan, the manager of the fund that owns the SPV, said
in October that two institutional investors — one global and
one domestic —had agreed to terms to buy the 2008 greenfield
development for about $115 million. A deal was expected before
54 PERE | 2010 AwArds & AnnuAl review
the year expired.
The willpower behind the completion of this deal was hugely
palatable for India’s private equity fund managers, particularly
should the investment end up in the hands of the global option.
A glance at recent research by Venture Intelligence showed how
international funds invested just $183 million into real estate
deals in 2009 and just $123 million in 2010, as investors were
turned off by few visible exits in the aftermath of the global economic
downturn.
Success would demonstrate the ability of a domestic fund to
exit to an international investor and give others more comfort
with the notion of an investible India ahead. The Peepal Tree
deal suggested the market is nearly there.
A big new route for China
september’s ruling by the CirC offered a more
viable exit for certain investment strategies
September’s ruling by China’s insurance regulator, the China
Insurance Regulatory Commission (CIRC), to allow Chinese
insurance companies to invest up to 10 percent of their assets in
real estate undoubtedly provided the Chinese real estate investor
with numerous positives.
Predictions of how much would be committed to the asset
class by the $670 billion insurance sector have been numerous
and diverse. An amount between $15 billion and $100 billion
reportedly had been earmarked for deployment from big guns
such as China Life and Ping An.
One source PERE spoke to foresaw greater demand for institutional-grade
assets as a consequence and less speculative
investing – a sure sign of a maturing market. “These guys are
going to be long-term owners, and that’s a good thing for the
market,” he remarked. “Soon, we’ll have greater flexibility in
terms of who we can sell to.”
The introduction of insurance capital in China offers a sustainable
exit channel for private equity real estate firms, but certain
firms with existing China strategies should consider themselves
a little more fortunate than others. The CIRC rules stated that insurers
cannot invest in residential assets, perhaps as part of wider
market-cooling state prerogatives, but those firms with retail
strategies could offer insurers real estate directly associated with
China’s rising consumer base now that housing was off the table.
Harvest Capital is one such firm, having launched two vehicles
aimed at increasing its exposure to retail at the turn of the
year. Meanwhile, CITIC Capital signaled its intention to prioritise
retail investing over residential as it purchased its first shopping
centre project in Changsha, Hunan Province. For firms
such as these, there is a big new exit route for their properties.

Trap for some, honey for others
despite stories of private equity firms running into
trouble with their Macau investments, the gaming
state’s demographics were impossible to ignore
Is Macau a honey trap for international investors? The mess
that is Macau Studio City was the latest in a line of stories
emanating from the former Portuguese colony that would
suggest so.
A three-year dispute over financing between the multiple
owners of the casino development – including Oaktree Capital
Management and Silver Point Capital – could end with it being
handed back to Macau authorities. If so, the two investors
would be hit with a loss of $250 million.
Non-gaming schemes backed by private equity also hit difficulties,
particularly those without secure planning consents
at the time of the conviction of Ao Man-long, Macao’s former
ministry of transport and public works responsible for planning
decisions. After he was jailed for 27 years in January 2008
amid a state-wide corruption and bribery scandal, numerous
schemes were hit with more onerous zoning constraints.
While there are anecdotes aplenty of real estate investors
running aground, it is impossible not to be attracted to Macao’s
honey despite its numerous traps. Macau generated GDP
growth of 8.2 percent and record gaming revenues of $15 billion
in 2009. In comparison, Las Vegas generated $10.4 billion.
Considering that gambling is the Chinese national pastime and
there is just one place – Macau – where it can be done legally, it
is illogical not to allocate something.
More importantly, firms have been able to make full-circle
investments in Macau and handsome profits. Take Manhattan,
the joint venture residential scheme between Citi Property Investors
and local developer-cum-investor Macauland. Within
a couple of years, the partners had sold and their exit reflected
an IRR of more than 30 percent and a 1.8x equity multiple.
Probing China’s bubble
Private equity real estate firms considered their
options as China’s real estate market continued
to heat up
When chairman and managing director of JPMorgan Chase’s
China equities division, Jing Ulrich, painted a picture of China’s
overheating real estate market for the benefit of delegates
at the PERE Forum: Asia in February of last year, she could not
have guessed that the temperature would continue rising.
Ulrich, who was featured in Forbes’ 100 most powerful
women table two years ago, told the audience how China’s
GDP growth had reached 10.7 percent in the final quarter of
2008, predominantly on the back of a rising domestic real estate
market.
Ulrich explained how loose government policy and bank
lending had led to record growth in real estate lending of 33
percent year-on-year (compared with a five-year average of between
14 percent and 16 percent), spawning worrying levels of
real estate speculation. But she suggested the government had
taken adequate measures to stem the inflation of an uncontrollable
bubble, ensuring Chinese real estate would receive a soft
landing should the bubble burst.
Forecasting that property sales and acquisitions would fall
by 15 percent in 2010, Ulrich predicted 2010 would yield little
further government intervention, but the opposite happened.
With GDP growth at 11.9 percent year-on-year, according to
China’s National Bureau of Statistics, Beijing introduced extra
taxes on areas including individual’s profits from property
sales. And it appears the government isn’t letting up in 2011,
having already announced property tax trials on some homes
in high-value areas of Shanghai in January.
new GPs wanted
lPs on stage at the Pere Forum: Asia expressed
support for first time funds. that was good news
as there were many new funds in the works
Any delegate at the PERE Forum: Asia thinking of setting up
his or her own real estate fund management platform would
have been heartened by what was said on stage during the final
panel conversation. Five LPs, either already invested in Asia
real estate funds or seriously thinking about committing to
Asia real estate funds, unanimously agreed they were keen to
support qualified first-time fund managers.
One LP – Nirav Kachalia, managing director of investments
at US- and Asia-focused investment advisor Morgan Creek –
was so keen to stress his support for newcomers he told delegates
his firm had backed 70 first-time funds. Furthermore,
60 percent of the managers backed by his organisation were
through funds one, two or three.
Doug Coulter, vice president and head of private equity for
Asia Pacific at private equity fund of funds business LGT Partners,
went one further when he said the firm’s best performances
on balance had come from backing first-time funds. He told
delegates the firm, which had only made minor investments in
real estate vehicles in Europe before now, was seriously considering
a more extensive Asia investment programme.
The other three participants – including the panel chair, another
LP – made similarly encouraging remarks. This was good
news for anyone thinking of spinning out to start a new firm.
In the three months prior to the conference, PERE broke multiple
news stories of individuals flying their own fund management
flags for the first time.
One often hears that many investors avoid “first-time funds”.
However, in a less mature market like Asia, there simply aren’t
that many Fund IIIs out there. In addition, in today’s turbulent
real estate market, investors are keen to back talented groups
that are not saddled with disastrous portfolios and who will
pursue fresh strategies informed by the painful mistakes of the
last cycle. Indeed, it’s time to back the next generation.
2010 AwArds & AnnuAl review | PERE 55

toP stories | AsiA
Seoul searching
excerpts from the 10 most-read stories for Asia show that Korea was a hotbed
of activity, not least due to the sheer volume of investment equity to emanate
from the east Asian country
1Korea: saviour of opportunity
funds?
the national Pension service of Korea
revealed it was planning to make up
to eight commitments of $150 million each to
value-added and opportunity funds in 2011
The world’s largest LPs have
been saying for a couple of
years now that they are shunning
higher risk funds in favour
of more core investments
and less blind alternatives. As
such, it was fairly predictable
that December’s news of the
National Pension Service of
Korea’s (NPS) investment plan
for 2011 would grab the attention
of value-added and opportunity
fund managers around
Kang: ascending the risk curve the globe.
NPS determined at the tail
end of last year to make up to eight $150 million commitments
into opportunistic strategies, the majority of which were to be
made in Q1 this year. The decision to ascend the risk-curve
followed more than a year of the $270 billion sovereign wealth
fund committing equity to core strategies focused on major
cities. Via separate accounts awarded to managers such as
Rockspring Property Investment Managers, Prudential Financial’s
Pramerica Real Estate Investors and Cleveland-based
The Townsend Group, it appears NPS has parked enough capital
in low-risk deals, for now.
NPS’ real estate head, Andie Kang, told PERE: “I like real
opportunity funds, not those run by the financial engineers
but by those who understand real estate and how to add value.”
There are some caveats to the intended commitments,
namely geographical. Overweight in Europe after making a
number of large outlays over the past 18 months, including
the £772 million purchase of HSBC Tower in London’s Canary
Wharf and the €570 million acquisition of the Sony Center
in Berlin, NPS will seek to make more than 50 percent of the
commitments to North and South America and Asia. Additionally,
between 40 percent and 50 percent will be devoted to
debt strategies.
NPS may well be a forerunner of what is to come. Commentators
increasingly are suggesting the world’s core markets are
becoming saturated with equity-rich investors seeking safe
56 PERE | 2010 AwArds & AnnuAl review
investments. With yields being pushed down in many cities
to unattractive lows, perhaps other large LPs will follow in the
sovereign wealth fund’s footsteps.
2BoA Merrill Lynch agrees
to $650m LP settlement
investors in its Asian real estate
opportunities Fund received a large
settlement from the wall street bank and, in the
process, struck a blow for lP rights
The private equity real estate community can seem like a
bubble sometimes, with the wider financial world an afterthought.
However, that certainly was not the view of Bank
of America Merrill Lynch (BoA ML) when it opted to pay
the LPs of its Asian Real Estate Opportunities Fund a settlement
valued at $650 million after the 25-strong investor pool
threatened litigation.
At the heart of the grievance were actions taken by the bank
considered non-fiduciary. More specifically, they included an
ill-timed foreign exchange trade and a poorly executed series
of valuations of assets transferred from BoA ML’s balance
sheet into the fund when it was launched. An admission of
wrong-doing was in order, but the Wall Street bank definitely
had one eye on future relationships with its investors, which
included the Abu Dhabi Investment Council, French insurer
AXA and the General Electric Pension Trust, when making
the offer in August. It was unanimously approved at a meeting
in Hong Kong three months later.
For the LPs, the money wasn’t the only incentive for settling.
The agreement included removing BoA ML from its
general partner and asset management responsibilities and
replacing it with New York giant The Blackstone Group. Already
a potent force in the US and Europe, Blackstone was
able to plug a personnel gap in its Asia real estate team, inheriting
more than 60 staff. The firm’s preference was to keep the
asset management contingent of that team, about 25 people,
to add to its existing roster of 15 as it worked through a mandate
of managing out the fund.
Even better for Blackstone, the firm came into the fray with
less expectation to deliver stellar performances from the vehicle
than its predecessor. Indeed, one insider said it could
barely be expected to return much more than 70 cents on every
dollar invested.
The settlement represented the first major example of an LP
revolution bearing serious fruit. Whether it stimulated other

disaffected investor pools to do likewise will no
doubt become clearer this year.
3Schmidt bids farewell
to Morgan Stanley
Morgan stanley’s head of
real estate investing in Japan
resigned to launch a news real estate
investment management business
The news that Morgan
Stanley Real
Estate Investing’s
head in Japan, Fred
Schmidt, had resigned
to start a new
venture was the talk
of last year’s PERE
Forum: Asia. After
all, one sure sign
of an investment
market nearing the
bottom is when in-
Schmidt: sayonara MSREI dividuals leave or
spin out platforms
from established businesses to give the next cycle
a go themselves.
Over the following months, PERE learned that
Schmidt would team up with MSREI’s joint global
heads John Carrafiell and Sonny Kalsi to launch a
new business called GreenOak Real Estate Advisors.
The business would grow to comprise platforms
in Europe, North America and Asia, the latter
of which was to be led by Schmidt from Tokyo.
Today, GreenOak Investment Management has approximately
12 staff and is in capital raising mode
for its first fund, GreenOak Japan Fund 1. The vehicle
has a target of $500 million and a first closing
is expected imminently.
Schmidt was in charge of MSREI’s Japan business
as the firm invested colossal amounts of equity
on behalf of its ill-fated $8 billion Morgan
Stanley Real Estate Fund VI. In 2007, for example,
it invested $3 billion on a portfolio of 13 hotels
from Japan’s All Nippon Airways, for which it later
struggled to refinance the $2.4 billion of debt taken
out to finance the deal amid crumbling values. One
report by Reuters said the bank managed a portfolio
in Japan valued at more than $10 billion during
the heady days of 2006 - under Schmidt’s watch.
Whatever the residual feelings of his tenure
at Morgan Stanley, initial sentiment towards his
GreenOak effort have been positive. One large investor
PERE spoke to even admitted he was poised
to make a significant commitment to the new firm’s
incoming vehicle.
Best of the rest on
PEREnews.com [Asia]
4
ADIC’S BuRTOn RETIRES
Mark Burton, the former chief investment officer for Abu Dhabi’s
sovereign wealth funds, brought the curtain down on his illustrious career.
He went on take various non-executive positions, most notably as advisor
on the investment committee of Norges Bank Investment Management,
the group responsible for managing and investing the assets of Norway’s
sovereign fund.
5
APOLLO LAunCHES ASIA DIVISIOn
Just a few short months before taking over Citi Property Investors’
global platform, Apollo Global Real Estate Management absorbed a sevenstrong
investment management team in Asia by the name of Holdfast
Capital. Formerly part of Colony Capital and led by Grant Kelley, Apollo
found a business primed for launching its first Asia real estate fund.
6
AIG LInES uP SALE TO InVESCO
Asset sales continued at US insurance giant AIG with its private
equity real estate business in Asia. PERE learned in November that Invesco
had become the sole bidder for the platform, which had $12.4 billion of
assets under management according to a January 2009 statement by AIG’s
about its decision to sell it.
7
HARVARD, CIC EnD FunD SALE TALKS
Harvard’s proposed sale of secondary fund positions and other
assets to China’s $300 billion sovereign wealth fund drew significant
attention. The one-month flirtation between the two parties was reported
to have happened between August and September, but ultimately a deal
never happened. No official reason for the negotiation breakdown was
revealed.
8
MSREI CLOSES KOREA OPS
As the year drew to a close, Morgan Stanley Real Estate Investing
(MSREI) decided to shutter its Korea operation. A source said MSREI no
longer saw Korea in its investment strategy for Asia, which had become
predominantly focused on ‘value added and distressed plays in the
developed markets and strong growth plays in the emerging markets’.
9
KOREA SWF APPOInTS PARTnERS GROuP
The National Pension Service of Korea wasn’t the only sovereign
entity from Korea to increase its real estate exposure in 2010. In July, Korea
Investment Corporation, the $30 billion sovereign wealth fund created
five years ago, appointed Partners Group to advise it on investments,
particularly restructuring and recapitalisation opportunities.
10
in 2010
MACQuARIE AGREES TO PRESIDIO TAKEOVER
The Australia banking heavyweight looked set to increase its
real estate capital raising capabilities by acquiring San Francisco- and
Chicago-based Presidio Partners in September. The deal, which would
see Macquarie inherit a 19-person team with a track record of raising a
combined $30 billion from 390 institutions, was expected to be completed
by the start of 2011.
2010 AwArds & AnnuAl review | PERE 57

oundtABle | AsiA
(L to R) Khoo, Brasse, Price and Ren: China’s policy becoming increasingly important
Sino watching
An excerpt from PERE’s Asia roundtable in november found participants focused as
much on events in China’s economy as those in the us
For the previous two years, PERE roundtable participants felt
obligated to temper their optimism about Asia’s growth story
with less-encouraging economic events transpiring in the
West. And with this year’s roundtable taking place one day
after the US Federal Reserve announced a second attempt to
resuscitate America’s flailing economy, it seemed the trend
might continue.
Indeed, news of the Fed’s plan for an additional $600 billion
in quantitative easing, dubbed QE 2, would have caused
serious ripples in 2009. Not so last year, as the participants
were more conscious about China’s economic policy.
“The amount of money the US government is pumping
into the system potentially has negative consequences for
all of Asia’s markets, specifically China,” said Richard Price,
chief executive officer for Asia at ING Real Estate Investment
Management (REIM). “But if you boil it down, what happens
to China is really going to drive what happens globally. If
the Chinese economy falls out of bed, then all bets are off
world-over.”
Rong Ren, chief executive officer of China-focused Harvest
Capital Partners, pointed out that reactions to the US
stimulus demonstrated just how Hong Kong, traditionally
an economic sentiment conduit between the West and East,
was becoming more closely pegged to Shanghai than New
York. “People are realising that Asia’s economies are now
more closely aligning with each other,” he said. “You cannot
divorce the East from the US, but the impact from the West
is becoming smaller.”
These macroeconomic insights kicked off a discussion of
the most pertinent topics and issues relevant to the private
equity real estate industry in Asia today. Price, Ren and a
58 PERE | 2010 AwArds & AnnuAl review
third participant – AXA Real Estate’s global head for Asia,
Frank Khoo – discussed investor appetite, investment trends,
financing and real estate market fundamentals, all of which
the US would barely figure into again. Instead, the one country
firmly melded into their narrative montage of insights,
anecdotes and metaphors was the People’s Republic of China.
Ren described global reactions to Chinese exports, a traditional
barometer for the health of the country’s economy,
to underline his point. “When Lehman Brothers collapsed,
China’s government was nervous about the effect on exports
to the West,” he noted. A member of China’s Central
Bank committee at the time, he recalled: “They questioned
whether people would still buy China’s products. One quarter
later, customs office data showed exports had increased
22 percent.”
Nobody at the table would say China has or would decouple
from the US. But with policymakers in Beijing wheeling
out measures to stem growth while their counterparts in the
West introduced stimulators, all were convinced they are in
the right region to ply their trade.
Even though real estate sits centre in China’s efforts to cool
its economy, each participant maintained that the country
remained firmly at the centre of their firms’ long-term investment
strategies. Furthermore, they weren’t perturbed by media
noise about bubbles, particularly in the residential sector.
“I’ve heard of apartments going for $23 million,” Price
said. “Those apartments are overpriced, but it doesn’t mean
there’s a bubble. We spend an awful lot of time analysing data
to really understand supply, demand and structural drivers,
and China’s markets will largely remain very robust for as
long as we can forecast.”

A warning to all general partners about to book plane tickets
to Abu Dhabi: if your purpose is to lure one of the world’s
largest sovereign wealth funds into investing in your latest
blind pool real estate fund, save your airfare. Traditional fund
commitments are not what the Abu Dhabi Investment Authority
(ADIA) is about these days.
There is change afoot within ADIA’s Real Estate Department
(RED), as it is taking a more “hands-on” approach to
managing its real estate investments. Today, RED is just as
likely to be your “equal” investment partner as your limited
partner.
Bill Schwab, ADIA’s global head of real estate, said the sovereign
wealth fund was prepared to invest its substantial petrodollars
across the property sectors in different stages of the
development process and would consider both public and private
debt and equity investments. “The mandate we have here
is very broad,” explained the 58-year-old, white-haired sixfooter,
who emigrated from London to the emirate in January
2009. “We are able to step in and out of the capital structure
and can be as flexible as we need to be if it fits our strategy and
makes sense for a particular deal.”
In fact, that strategy was first formulated in 2006. The plan
was drawn up by senior members of RED who concluded
that ADIA needed to refine its property investment approach
in order to better capture an increasingly complex set of opportunities.
Many know ADIA as one of the world’s most coveted cornerstone
LPs but, while that would not be incorrect, today
ADIA has much broader ambitions than being just that. Unlike
in the wider organisation, where 80 percent of its assets
are managed externally, RED has long invested directly and
often in joint venture partnerships.
That said, since its formation in 1976 as a replacement for
Abu Dhabi’s Financial Investments Board, real estate historically
has played a minor role (although sizable in absolute
terms) in the UAE capital’s overseas portfolio compared with
its significantly larger positions in equities and bonds. Its current
exposure to real estate is within its 5 percent to 10 percent
allocation range, pegging the value of ADIA’s property portfolio
at somewhere between $15 billion and $60 billion.
RED has sole responsibility for originating investment
ideas, and all decisions are made on a purely commercial basis.
The person who sets RED’s overall direction and oversees
the team’s activities is Majed Al Romaithi, executive director
for real estate. It was Al Romaithi who led RED’s more self-reliant
investment strategy and began the recruitment process
that resulted in Schwab’s appointment following the departure
of chief investment officer for real estate Mark Burton.
While Al Romaithi represents the real estate division in
the investment committee, Schwab is responsible for manag-
BluePrint | AsiA
Inside ADIA
in an excerpt from one of our Blueprint interviews, PERE was given an exclusive briefing
on the evolving strategy of one of the world’s most capital-rich property investors
Schwab: Leading a new regime
ing RED’s investments and is given the “latitude” to execute
the strategy. “What brought me here was the chance to have
a positive impact on one of the world’s leading real estate investors,”
Schwab explained. “We have hired some of the best
talent in the world, and these people would not have come if
they did not feel they could have a similar impact.”
Looking ahead, RED will maintain a strong focus on existing
partners, even if, on the LP side, some of the structures of
the investment vehicles they manage have become outmoded.
Schwab did offer a glimmer of hope for general partners of
private equity real estate firms offering “a degree of flexibility,
a series of reconfiguration points” and “expanded major approvals”,
but ultimately blind pool funds are now “the exception
rather than the rule”.
RED is invested in more than 100 real estate funds run by
a variety of managers. According to PERE sources, however,
ADIA recently has declined several opportunities to invest
in new funds by well-known industry players. As previously
stated, that’s not what ADIA is about these days.
2010 AwArds & AnnuAl review | PERE 59

PERE FORuM | ASIA
(L to R) Richard Price, Cheng-Soon Lau, Goodwin Gaw, John Saunders, Jason Lee
Jing Ulrich
Ronnie Chan
More than money
domestic capital continued to boom in markets like
China, prompting international fund managers to
demonstrate what else they could bring to the table
International GPs must rely on their real estate expertise rather than their equity
resources if they are to compete with the more prominent domestic investors in
Asia, delegates at PERE’s third annual forum in Hong Kong were told.
Indeed, that was the view of a panel of GPs after they were questioned about
how they could compete with capital-rich domestic buyers. “It’s about what else
you can bring to the table other than cash,” said John Saunders, managing director
for the Asia portfolio at MGPA. “We have focused on where we can bring
skills such as development, planning, leasing and management.”
Richard Price, chief executive officer for ING Real Estate Investment Management,
highlighted the additional challenge faced by international firms, which
must meet their fiduciary duties but, as a result, can lose out on investments to
local buyers with no such constraints.
Some small comfort came from the words of MGPA’s chairman Jim Quille,
who labeled the surge of investors moving from general partnerships to club investment
structures as a preserve of the very largest institutions, not the masses.
Ben Sanderson Jonathan Brasse interviews Jim Quille

AnnuAL REVIEW | DATA

PERE 30
A changing
landscape
each year, PERE ranks the 30 largest
private equity real estate firms in the
world according to how much they
have raised in dedicated commingled
funds over the most recent five-year
period. in the five years up to April 2010,
the top 30 firms raised an impressive
$207.76 billion, just slightly off the record
pace of the previous five-year window.
However, with the exception of starwood
Capital Group, which raised two big
funds and shot up 17 places, the rankings
were pretty static due to a lackluster
fundraising environment in 2009.
that is likely to change.
with another year over and a new Pere
30 about to be ranked, readers can
expect to see some real movement in the
chart for 2011. After all, 2010 was a year
of change. some big players, like Citi
Property investors, lehman Brothers and
Bank of America Merrill lynch, exited the
business through sales and closures, while
new players – hello, Peakside Capital
and silverpeak real estate Partners –
were formed through managementled
buyouts. And, of course, there was
consolidation, not the least of which
was CBre investors’ acquisition of inG
real estate investment Management – a
transaction expected to catapult the firm
into the upper echelon of the rankings.
so, take one last look at the Pere 30
for 2010. this group is likely to look very
different in 2011.

2010
Rank Name of Firm Headquarters
Capital Raised
($BN)
2009
Rank
1 The Blackstone Group New York $24.05 1
2 Morgan Stanley Real Estate Investing New York $19.15 2
3 Tishman Speyer New York $13.62 8
4 Goldman Sachs Real Estate Principal Investment Area New York $13.58 3
5 Colony Capital Los Angeles $10.43 4
6 LaSalle Investment Management Chicago $9.48 7
7 Beacon Capital Partners Boston $9.40 5
8 The Carlyle Group Washington DC $8.80 9
9 MGPA London $7.60 11
10 Lehman Brothers Real Estate Private Equity New York $7.15 6
11 CB Richard Ellis Investors Los Angeles $6.47 12
12 Westbrook Partners New York $6.13 10
13 Starwood Capital Group Greenwich, CT $5.91 30
14 AREA Property Partners New York $5.72 13
15 Prudential Real Estate Investors Parsippany, NJ $5.48 15
16 Rockpoint Group San Francisco $5.13 14
17 daVinci Advisors Tokyo $4.33 17
18 Grove International Partners New York $4.30 22
19 Hines Houston $4.26 20
20 Lubert-Adler Real Estate Philadelphia $4.18 16
21 RREEF Alternative Investments New York $4.05 18
22 Walton Street Capital Chicago $3.93 19
23 Citi Property Investors New York $3.46 21
24 Angelo, Gordon & Co New York $3.40 25
25 Bank of America Merrill Lynch Global Principal Investments New York $3.28 —
26 Shorenstein Properties San Francisco $3.16 24
27 Lone Star Funds Dallas $3.11 —
28 Heitman Chicago $3.05 28
29 Aetos Capital New York $2.98 —
30 Rockwood Capital New York $2.45 —
ToTal $207.76
Legend: Higher rank than 2009 Lower rank than 2009 Same rank as 2009 PERE 30 debut Return to ranking
2010 AwArds & AnnuAl review | PERE 63

Capital watch
Funds Closed in 2010
FIRm FuNd HEadQuaRTERS STRaTEGY CloSE TaRGET(m) CloSEd(m) daTE
Global funds
Beacon Capital Partners Beacon Capital Strategic Partners VI Boston Europe / US office Final $6,000 $2,500 Feb
Kennedy Wilson Kennedy Wilson Property Fund III Beverly Hills (CA) US, Hawaii, Japan diversified Final $300 $125 Aug
Lone Star Funds Lone Star Real Estate Fund II Dallas Global diversified First $4,000 $725 Jan
Morgan Stanley Real Estate Investing Morgan Stanley Real Estate Fund VII Global New York Global diversified Final $10,000 $4,700 Jun
Starwood Capital Group Starwood Capital Global Hospitality II Greenwich (CT) Global hospitality Final $1,500 $1,000 Apr
Starwood Capital Group Starwood Global Opportunity Fund VIII Greenwich (CT) Global diversified Final $3,000 $1,800 Apr
Global funds subtotal $10,850
americas funds
Buchanan Street Partners Buchanan Fund VI Newport Beach (CA) US diversified First $600 $75 Jul
Clairvue Capital Partners Clairvue Capital Partners I San Francisco US recapitalisations First $500 $250 Jun
GEM Capital Management N/A Chicago US diversified Final N/A $545 Jun
Harrison Street Real Estate Capital Harrison Street Real Estate Partners III Chicago US niche Second $500 $330 Jun
The JBG Companies JBG Fund VII Chevy Chase (MD) DC diversified Final N/A $577 Feb
JCR Capital JCR Capital Distressed & Opportunistic
Real Estate Fund I
Denver US diversified Second $30 $24 Jun
John Buck Co. JBC Opportunity Fund IV Chicago US diversified First $500 $100 Jul
Kayne Anderson Real Estate Partners Kayne Anderson Real Estate Partners II Armonk (NY) US student housing First $350 $119 Dec
LaSalle Investment Management LaSalle Canada Income & Growth Fund II Chicago Canada diversified Final $350 $230 May
Momentum Real Estate Momentum Real Estate Partners Miami Sunbelt diversified First $75 $25 Jul
PRP Real Estate Investment Mgmt PRP US Govt Income and Growth
Property Fund
Washington DC US government-leased First $400 $100 Jul
Rialto Capital Management Rialto Real Estate Fund Miami US distressed First $750 $300 Dec
Vornado Realty Trust Vornado Capital Partners New York US office and urban retail First $1,000 $550 Jul
W3 Partners W3 Value-Add Fund San Francisco US office First $300 $100 Dec
Figures are through 31 December 2010
Americas funds subtotal $3,325
Europe funds
AXA Real Estate AXA Development Venture III Paris Europe development First € 600 € 230 Jul
Brockton Capital Brockton Capital Fund II London UK diversified Final £300 £500 Aug
Climate Change Capital Climate Change Capital Green
Property Fund
London UK green properties Final N/A $107 Feb
ECE Projektmanagement European Prime Shopping Centre Fund Hamburg European retail First € 500 € 380 Dec
Frogmore Property Company Frogmore Real Estate Partners II London UK diversified Final N/A $335 Feb
Henderson Global Investors Henderson Central London Office Fund II London London office First £200 £90 Jun
Jensen Group Jensen Russian Real Estate Fund II St. Petersburg Russian Commercial Final $615 $88 Jun
LaSalle Investment Management UK Special Situations Fund Chicago UK special situations First N/A £100 Sep
OFI REIM / F&C REIT Asset Management FOSCA II Paris / London France office and retail First N/A $124 May
Pradera Europe Pradera Central & Eastern Fund London Central/Eastern Europe retail Final N/A € 202 Jul
Rockspring Prop Invest Rockspring UK Value Fund London UK diversified Final £700 £336 Jun
Schroder Property Columbus UK Real Estate Fund London UK diversified First £250 £80 Mar
Signa Real Estate Capital Partners Development Fund I Innsbruck Europe diversified Final N/A $267 May
Sveafastigheter Sveafastigheter Fund III Stockholm Nordic diversified First €300-400 € 120 Mar
Wainbridge Capital Wainbridge Global Opportunities London London office, mixed-use First £100 £50 Oct
Europe funds subtotal $4,092
asia / RoW funds
Aetos Capital Aetos Capital Asia IV Strategic Partners New York Asia diversified First $1,000 $250 Jan
Altis Property Partners Altis Real Estate Equity Partnership Sydney Australia diversified First A$200 A$92 Dec
Angelo, Gordon & Co AG Asia Realty Fund II New York Asia diversified Final $650 $625 Oct
ASK Group N/A Mumbai India residential Final N/A $75 Feb
Banyan Tree Holdings Banyan Tree China Hospitality Fund Singapore China hospitality, resorts First N/A $141 Nov
The Carlyle Group Asia Real Estate Partners II Washington DC Asia diversified Final $1,000 $485 May
Fortress Investment Group Fortress Japan Opportunity Fund New York Japan debt Final $800 $800 Jun
Forum Partners Forum Asia Realty Income III Greenwich Asia diversified First $1,000 $200 Jul
Fosun Group Star Capital Investment Fund Shanghai China development First $1,800 $900 Dec
Gaw Capital Gateway China Real Estate Fund III Hong Kong China diversified First $950 $373 Aug
Harvest Capital Partners CR China Retail RE Dev. Fund I Hong Kong China retail First $500 $325 May
Kenedix N/A Tokyo Japan diversified Final N/A $110 Jun
Perennial Real Estate N/A Singapore China diversified Final N/A $176 Apr
SC Management Real Estate Capital Asia Partners II Singapore Asia diversified Final $400 $190 Mar
Sniper Capital Macau Sniper Fund Hong Kong Macau retail First $100 $20 Nov
UBS Global Asset Management /
Gemdale Corp.
UBS / Gemdale Investment
Management
London / Shenzhen
(China)
China residential Second N/A $200 Dec
Winnington Capital Trophy Property Development II Hong Kong China diversified First $300 $100 Oct
Asia / RoW funds subtotal $5,061
Fund of funds/Secondaries
Aviva Investors N/A London Global secondaries, recaps First $500 $100 Oct
CBRE Investors Asia Alpha Plus Los Angeles Asia diversified Final $200 $269 Jul
Morgan Stanley Alternative Investment
Partners
Morgan Stanley AIP Phoenix Global
Secondaries Fund
New York Global secondaries Final $250 $370 Mar
Partners Group Partners Group Real Estate
Secondary 2009
Zug (Switzerland) Global secondaries Final N/A € 750 Nov
Siguler Guff Siguler Guff Distressed Real Estate
Opportunity Fund
New York Global diversified First $750 $125 Jul
Sparinvest Property Investors Sparinvest Property Fund II Copenhagen Global fund of funds Second € 250 € 110 Jan
Fund of funds/Secondaries subtotal $2,021
2010 ToTal $25,347
64 PERE | 2010 AwArds & AnnuAl review

EUROPE 2011
REALISING GROWTH IN NEW OPPORTUNITIES
9th & 10th June 2011 | Hilton Tower Bridge, London
www.peimedia.com/pereeurope11
Book your
place today:
Lead Sponsors:
The PERE Forum: Europe, now in its 7th year, is the paramount event for the private
real estate investor, attended by the leading players in the industry.
Roger Barris,
Partner and Chairman,
Peakside Capital
Steve Felix,
Head of Real Estate
Client Relations-North
America,
Aviva Investors
Russell Platt,
Chief Executive Officer,
Forum Partners
This is one European real estate event that never disappoints.
Presentations are always very relevant to what is happening in
the market and the speakers are of the highest calibre.
Keith M. Breslauer, Managing Director, Patron Capital
Online
www.peimedia.com/pereeurope11
David Boyle, Executive
Director, Portfolio Manager
Real Estate, Alternative
Investment Partners,
Morgan Stanley
Investment Management
Dale Lattanzio,
Managing Director,
Duet Private Equity Ltd
Rob Reiskin,
Co-Head of Europe,
Heitman
Book by 6 May to save £200
Phone
+44 (0) 20 7566 5445
Dr Ian Cullen,
Head of Systems and
Information Standards,
IPD
Chad Pike,
Senior Managing
Director and Co-Head
of Real Estate,
The Blackstone
Group
Isabelle Scemama,
Head of Commercial
Real Estate Finance,
Axa Real Estate
Email
tereza.l@peimedia.com

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