2010AWARDS & AnnuAL REVIEW - PERE

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.