JER to close Latin America operations

The McLean, Virginia-based firm is immediately closing its Latin America fund and operations.

JER Partners is closing its Latin America operations with effect from tomorrow, PERE has learned.

According to an email sent by JER’s Mexico director Sergio Hernandez and seen by PERE, the private equity real estate firm is closing its “Latin America fund and operations as of August 1, 2009” owing to the “global economic crisis”.

Former JER chief operating officer Michael Pralle aggressively developed JER’s presence in Latin America, hiring a raft of senior professionals to source investments from their newly-opened Mexico and Brazil offices. Many came from Pralle’s former employer, GE Real Estate.

Roberto Perroni, formerly superintendent director of Brazilian development and investment firm, Camargo Corrêa Desenvolvimento Imobiliário, led the firm’s operations from Mexico City, while Hernandez, previously national sales director of GE’s commercial finance arm, GE Capital Solutions Mexico, led the Sao Paulo office.

According to JER’s website, the Latin America team also includes Marcelo Horcel, a Brazilian national and former managing director of GE Real Estate Southern Europe; Ariel Amavizca, previously with former Black Creek Group affiliate MIRA Companies and Chris Bruneau, previously with Latin America advisory boutique East-West Financial Services. Horcel is a member of JER’s global investment committee and chairman of the firm’s Latin American investment committee, based at the firm’s headquarters in McLean, Virginia.

An executive at JER’s Virginia headquarters was unable to confirm whether both the Mexico and Brazil offices and respective staff were affected. It is also unclear what arrangements have been made to deal with existing assets. The executive said a statement would be issued shortly.

In the wake of the credit crisis, JER has turned its attention predominately to managing its assets.

Pralle left the firm for personal reasons in March and at the end of June, founder Joseph Robert announced he was stepping aside to make way for new management. Ex-Starwood Capital real estate vice chairman Barden Gale took over as chief executive officer of the overall firm, JE Robert Companies, at the start of July.

Gale and senior management are believed to be evaluating all aspects of the JER operation as part of their analysis of the firm.

In September, the California Public Employees’ Retirement System (CalPERS) recommended allocating $500 million to JER Partners' Latin America Fund I. A CalPERS spokeswoman said the pension did not comment about their partners’ operations.