ASIA NEWS: Filling big shoes

For an organisation that prides itself on team culture over individual prowess, the Government of Singapore Investment Corporation (GIC) would be hard pressed to deny the imprint of Dr Seek Ngee Huat on its real estate division, GIC Real Estate.

As Dr Seek brings the curtain down on 15 years of presiding over all things real estate to begin a tenure doing the same for all things Latin America, PERE heard from industry peers about how the man, now in his 60s, has led the transformation of GIC Real Estate into the titan it is today. As one GP partner said: “He is highly respected for building the organisation into what it is today, one that most sovereign wealth funds view as the benchmark for a successful model.”

Last month, GIC announced that Dr Seek would become chair of its Latin America business group as part of a wider raft of successions to take effect at the start of July. His replacement is Goh Kok Huat, a former Tishman Speyer and Ascendas executive who has benefited from a quick ascent, having been named deputy president of GIC Real Estate in July 2010.

According to PERE Connect, GIC Real Estate has grown to approximately $27 billion in assets under management, accounting for approximately 9 percent of the fund’s approximately $300 billion in total assets. Although the platform first emerged in 1982, just one year after GIC itself, industry peers say Dr Seek can take credit for it becoming one of the more sophisticated entities in global real estate. The platform’s current portfolio of more than 200 investments in 30 countries is laced with the man’s vision.

He is highly respected for building the organisation into what it is today, one that most sovereign wealth funds view as the benchmark for a successful model Unnamed GP of GIC

A good example of that vision came as early as 1996 with a commitment to one of Europe’s first opportunity funds, Crossroads Property Investors. The commitment enabled GIC Real Estate to partner with Unibail Group, the fund’s GP and one of Europe’s highest-profile public real estate companies, during a challenging time for public capital raising. “It was an immense success,” said one former colleague. “It didn’t change the landscape for GIC Real Estate, but it was a sign of its openness to new opportunities.”

GIC Real Estate would go on to make numerous additional fund investments with managers such as Andersson Real Estate Investment Management, ECE Projectmanagement, Lone Star Funds and ProLogis, according to PERE Connect. Despite its successes via funds, such commitments played only a small part of a much wider investment remit, which today takes in significant direct investments, joint ventures and investments in securities.

A good example of a well-timed direct investment under Dr Seek’s watch came in 2008 with the $1.3 billion acquisition of large parts of ProLogis’ Asia business. As with Unibail, GIC Real Estate was able to access assets, operated by a sector-leading company, at an opportune time. Indeed, ProLogis was struggling to repair a balance sheet wrecked by an ambitious expansion leading up to the global financial crisis.

Despite his role in such headline-grabbing deals, certain peers point to the building of GIC Real Estate itself as best demonstrative of Dr Seek’s legacy. “He has built a structure that is both centralised and decentralised, with teams in Singapore and around the world – that’s a legacy more important than specific deals,” said the ex-colleague. GIC Real Estate today has approximately 150 staff based in offices in Singapore, San Francisco, New York, London and Mumbai – another differentiator from certain sovereign funds, whose real estate divisions are based entirely in their home country.

Big shoes

Sometimes, people develop a degree of attachment to real estate investments. Goh’s certainly not one of those Unnamed former colleague

Goh is almost 15 years younger than his predecessor, although that might prove a positive given how long Dr Seek took to build GIC Real Estate into what it is today. And although the president-elect certainly has large shoes to fill, from all accounts, he has the credentials. For one, he is every part the high-flying public servant, having been awarded the Singapore Armed Forces Scholarship and Singapore’s Presidents Scholarship, the latter of which typically is awarded to just two to four people per year. He also brings international fundraising and development expertise from his almost three years with Tishman Speyer and has extensive knowledge of working for a Singaporean real estate platform with Ascendas.

One former colleague described Dr Seek’s replacement as a smart operator able to make “emotionally stable” decisions on investments. “Sometimes, people develop a degree of attachment to real estate investments,” he said. “Goh’s certainly not one of those. “ Among his milestone achievements was the creation of Singapore’s second REIT, Ascendas REIT, alongside Macquarie Goodman Industrial Management and its growth from S$600 million (€340 million; $484 million) in assets under management at initial public offering in 2002 to more than S$3 billion since.

The ex-colleague said Goh was the product of a very carefully orchestrated and executed succession process: “I think when he was recruited by GIC Real Estate in 2009, [his promotion to president] already was on the cards. He was the right choice and certainly better than any other internal candidate.”