US NEWS: AIP’s senior switch

Coinciding with the abrupt departure of its former head, Morgan Stanley’s real estate fund of funds group is bringing back its former chief capital-raiser. PERE Magazine, April 2012 issue

Morgan Stanley Alternative Investment Partners (AIP) delivered a Broadway-worthy performance last month within its real estate fund of funds business: Joseph Stecher exited stage left, while Paul Vosper entered stage right.

As PERE reported on 9 March, a succession plan already was in place when Stecher, who was head of the business, resigned last month. Vosper, who previously was chief operating officer of the group, will be returning to his old post in early May from RREEF Real Estate. Based in New York, he will co-head the business with David Boyle, who has succeeded Stecher as chief investment officer and will remain in London.

Stecher’s departure after four years at the firm was a surprise to others in the industry, who suggested that such an arrangement is a sign he was forced out. PERE sources noted that Morgan Stanley’s careful orchestration of the executive change showed that the investment bank wanted to avoid any disruption to the real estate fund of funds business from a gap in leadership. The firm’s choice of Vosper, they added, appeared to indicate that the firm wasn’t seeking a major shift in strategy for the platform.

“It always gives some investors pause or reason for concern when you see a senior management change,” said one fund of funds manager. “It’s a good thing they’re bringing back someone who was previously part of the team.”

Vosper spent a decade at Morgan Stanley and helped to launch the real estate fund of funds business with Stecher in 2008 before leaving to join AllianceBernstein two years later. He has been credited with raising the bulk of the capital for the Morgan Stanley AIP Phoenix Global Real Estate Secondaries 2009 fund, which closed on $370 million in commitments in 2010, exceeding its $250 million target.  By contrast, the AIP team had captured a total of $170 million in commitments for its real estate fund of funds, Morgan Stanley AIP Falconer Global Real Estate, at the end of 2011, less than half of its original target of $350 million.

Vosper’s return to Morgan Stanley is said to be well-timed, occurring after the final close of both AIP real estate funds. Indeed, Vosper and Boyle “have a couple of years to work with each other before they get back into the market to raise more money,” added another competitor.

Meanwhile, Morgan Stanley AIP and UK-based Wainbridge Capital Partners announced a partnership just last month to co-invest in value-added offices in London. Morgan Stanley’s commitment to the partnership would involve capital from the Phoenix fund.

Officials at Morgan Stanley declined to comment.