2010AWARDS & AnnuAL REVIEW - PERE

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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.
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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
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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.