Neil Cable has a big job on his hands. As head of European real estate at institutional fund manager Fidelity, he is spearheading the firm's maiden drive into direct property investment in Europe. The firm's ambition is to become one of the top five institutional owners of European real estate in ten years. Cable, who left insurer Standard Life last year, is under no illusions, however. “This is a long-term ambition,” he says.
Cable worked in the European property markets at Standard Life, where he spent more than a decade, but he is taking on a wider role at Fidelity, where he must build up the firm's internal infrastructure before actually buying any property.
As part of that process, he recently hired Keith Scott as head of acquisitions. Scott, who started last month, carved out a career working for German property companies, most recently GLL Real Estate Partners, where he was investment fund manager and head of Western European acquisitions. Prior to that, he was head of strategic portfolio management and head of property development at Munich ERGO Management, a subsidiary of Munich RE, and head of property consultancy at HypoVereinsbank in Munich.
“He is one of the few people around who can boast a genuinely long-term track record in European real estate having lived and worked in Germany for the past 14 years,” says Cable.
14 years,” says Cable. Acquiring of billions of euros of European property to compete with the likes of Morley Fund Management, Deutsche Bank, and ING might be a challenge, but Cable points out that Fidelity has $276 billion (€213 billion) of assets under management worldwide. In the mid-1990s, the firm decided to go into bond investments; a decade later it has $25 billion under management. “Broadly, we want to do the same with real estate,” Cable says.
Although Fidelity is moving into direct property investing at a time when liquidity and prices are high, Cable defends the firm's strategy. “With 20/20 hindsight, maybe you would have done this three years ago, but this is not a head-long rush to gather assets quickly,” he says. “We are in this for the long term.”
Fidelity will contribute around €227 million ($294 million) seed equity from its own balance sheet to kick-start the investment program. Cable declines to say when the firm would approach institutional investors to participate in a fund.
UBS poaches AXA man
UBS has hired AXA Real Estate Investment Managers chief executive Paul Marcuse to head the asset management arm of its global real estate business. Marcuse, who will also join the asset management firm's executive committee, replaces James O'Keefe. Marcuse, who will be based in London, will report to John Fraser, chairman and CEO of UBS Global Asset Management. Marcuse spent six years in charge of AXA Reim, which managed approximately $42 billion (€32 billion) of property assets as of September.
Eistrup leaves Morgan Stanley
Christian Schulte Eistrup, head of European investment strategy and research at Morgan Stanley Real Estate, has reportedly left the company. Eistrup was responsible for the formulation of market views and strategies for the firm's real estate funds and investing clients. He joined in 1998 and led a number of high profile private and public equity financings as well as mergers and acquisitions. Prior to Morgan Stanley, he was an accountant at KPMG in Germany.
Carlyle promotes French stars
The Carlyle Group has promoted Marc Demumieux and Catherine Simoni to managing directors in the European real estate team. Demumieux, who heads acquisitions in France and Benelux and joined in 2001, has led some notable deals including the purchase of ten buildings in Montrouge, Paris for €173 million ($225 million) and the acquisition of Banque de France, a 34-asset French portfolio for €60 million. Simoni, who leads Carlyle's asset management team in Paris, has been responsible for the management of all the French and Benelux assets. Both report to Eric Sasson, the head of Carlyle's European real estate team.
Quinlan Private makes Poland hire
Remigiusz Królikowski has been appointed head of property management at Quinlan Private Golub in Poland. The company is a joint venture between Derek Quinlan's private equity group and Chicago-based Golub. Królikowski is responsible for the company's property management team, which currently operates a number of properties including buildings in Wisniowy Business Park, the International Business Center and Forum Gliwice. Królikowski joined Quinlan Private Golub, previously GE Capital Golub, in 2003. He previously worked with AIG Lincoln Polska, Geem Development and Mennica Invest.
ING beefs up fund management
ING Real Estate is beefing up its European fund management team by promoting Jan Vermaas to the new position of head of European non-listed funds. Vermaas will be responsible for the overall management, performance and profitability of the non-listed European real estate funds managed by ING Real Estate's Investment Management Division. He was previously country manager for ING Real Estate Investment Management in the Netherlands, as well as fund manager of the ING Dutch Office Fund.
Pirelli, GE purchase Italian NPLs
Italian real estate firm Pirelli RE and GE Commercial Finance Services have bought a portfolio of nonperforming loans in Italy with a gross book value of $1 billion (€1.3 billion). The portfolio was sold by Banca Antonveneta and Interbanca, subsidiaries of ABN AMRO. GE will act as the majority partner in the operation, with Pirelli RE holding a 35 percent stake. The portfolio comprises mixed commercial loans secured against real estate assets situated across Italy. This is the second acquisition by GE of non-performing loans in Italy, following a joint venture with ABN AMRO and Tecnocasa in 2006 that acquired a €1.8 billion portfolio from Unicredit Group. GE and Pirelli have also signed an exclusive deal with Banca Antonveneta to acquire additional NPL portfolios expected to come to market this year with a gross book value of approximately €5 billion.
Doughty Hanson to develop London property
Doughty Hanson Real Estate has bought a development property in the west end of London in a joint venture with Terrace Hill Group. The property, Howick Place, was bought from department store group House of Fraser, which will occupy the building until it is redeveloped. Doughty and Terrace Hill plan to turn it into a £180 million ($350 million; €266 million) mixed-use office and residential scheme. Doughty Hanson & Co European Real Estate Fund II is investing €37.5 million of equity. This is the fifth investment by Fund II and the second in the UK. The Fund's other UK investment is Kings Hill Business Park, held in joint venture with Liberty Property Trust.
Orion snaps up Paris block
Orion Capital Managers has signed a €112 million ($145 million) deal to acquire and refurbish a government-owned Parisian building. The office property on Rue d'Astorg in the central business district is being refurbished by Compagnie Immobilière Betelgeuse, a quoted property company owned by Orion European Real Estate Fund II. Hypo Real Estate Bank provided the financing for the transaction. The office is mainly leased to French government services. A full refurbishment will be undertaken at the expiration of the various leases; upon completion, the building will comprise 12,000 square meters.
GE buys €420m German office portfolio
GE Real Estate has bought a German specialty property fund managed by iii-investments for €420 million ($546 million). The fund's portfolio comprises 12 office properties across western Germany, located in Frankfurt, Munich, Hamburg, Dusseldorf, Stuttgart, Bonn and Karlsruhe. It is the first time GE has bought a regulated fund product in Germany. In a statement, Rainer Thaler, managing director of GE Real Estate Germany, said: “This acquisition, which is the first sizeable commercial real estate transaction that we are making in Germany, underlines our strategy for growth.”