Upload
others
View
3
Download
0
Embed Size (px)
Citation preview
Brookfield Strategic Real Estate Partners II Carlyle Realty Partners VII Blue Vista Real Estate Partners IV Crow Holdings Realty Partners VII
Location - Headquarters /
Team
Main: New York
Other locations: Toronto, London, Rio de Janeiro,
Sydney, Dubai, Honk Kong, Mumbai
Main: Washington, D.C.
Other locations: New York, Los Angeles,
San Francisco
Main: Chicago
Other locations: Fort Wayne, INMain: Dallas
Ownership StructurePublic company; directors and senior management
own 20% of common shares
Public company; three co-founders, Global
Partners, and minority investors own 79% of
common shares
Peter Stelian (37.5%), Robert Byron (37.5%), Allied
World Financial Services (25%)
Indirectly through intermediate subsidiaries, select
members of management team and various
affiliates of Crow Family Holdings
Recent / Pending
LitigationNothing material Nothing material
Filed suit against two former employees for taking
confidential materials from firm; judge ruled in
firm's favor (settlement pending)
None
Key Firm EmployeesBruce Flatt, Jeff Blidner, Barry Blattman, Ric Clark,
Brian Kingston, Brian Lawson, John Stinebaugh
Dan D'Aniello, Bill Conway, David Rubenstein, Rob
Stuckey
Peter Stelian, Robert Byron, Paul Sorensen, Laurie
Smith, Irene Moroko, Dan Reynolds, Jason
Schwartz
Anne Raymond, Bob McClain, Kevin Bryant, Dan
Feeney, Carlos Rainwater, Dodge Carter
Dedicated Senior Fund
Professionals
13 (67 total fund employees, 28,000 total
employees)
11 (80 total fund employees, 1,650 total
employees)23 (23 total fund employees, 37 total employees) 34 (60 total fund employees, 60 total employees)
Average Fund
Professional Experience21 years 21 years 15 years 14 years
Firmwide AUM as of
June 30, 2014$200B $203B $685M $6.5B
Total RE AUM as of
June 30, 2014$109B $13.2B $685M $4.7B
Number of Existing Real
Estate Funds17 funds globally 10 funds globally 6 funds 4 funds
Fund Target / Closed To
Date
$7B / First close in April anticipated
to be $4-5B$3B / $3B ($4B cap) $400M / $225M $1B / $518M
Expected Final Close2Q/3Q; six-month fee holiday if close by
May 292Q 3Q 3Q
Investment Style Opportunistic Opportunistic Value-Add Value-Add
Geographic Focus50% U.S. / 50% Europe, Asia-Pacific (Australia),
and South America (Brazil)Diversified U.S. Diversified U.S. Diversified U.S.
Property Type Focus
No specific targets; invest where they have
specialized knowledge and competitive
advantages
Diversified, including senior housing, for-sale
residential, and developmentDiversified, including self storage and development
Diversified, including convenience & gas, and
development
Return Target (Net) /
Equity Multiple16% / 1.8x 15-20% / 1.5-2.0x 15% / 1.5x 10-11% / 1.7x
Primary Sources of Deal
Flow
Regional and Sector heads, along with operating
platforms
Sourcing principals are assigned specific
responsibilities in target markets and sectors
Large network of sponsors and operating partners
nationally
Senior management relationships, brokerage
community
SURS Non-Core Real Estate Search
Summary of Direct Fund Finalist Candidates
April 2015
Org
an
izati
on
/ T
eam
Str
ate
gy / P
rocess
Assets
Exhibit 4
Brookfield Strategic Real Estate Partners II Carlyle Realty Partners VII Blue Vista Real Estate Partners IV Crow Holdings Realty Partners VII
SURS Non-Core Real Estate Search
Summary of Direct Fund Finalist Candidates
April 2015
Value Creation Process
Use expertise of operating platforms, utilizing
leasing, refurbishment, development, construction
and property management teams; apply corporate
finance, M&A, and restructuring experience
Maintain control over all major decisions; outline
steps needed to achieve targets, focus on steps with
active management, sell in disciplined manner
Invest jointly with local operators in need of capital
($2-$15M which are too small for most institutional
investors); provide GP co-investment capital and
participate in carry
Uncover opportunities to increase cash flow; expand
under-utilized sites; reposition "broken assets";
invest in recovering markets; buy below replacement
cost
Expected Number of
Investments
Typically larger investments, but number will vary
based on opportunity150-200 60 50-70
Expected Investment
Level Leverage50-65% 60-70% 60-70% 65% cap
Sponsor Co-Investment
($)At least $2B Up to $120M $5M
$5M GP commitment, plus $100M minimum from
Crow Family Holdings
Sponsor Co-Investment
(%)28.6% Up to 3% 2% 0.50%
Management Fee %1.5% on committed capital during investment
period, thereafter, 1.5% on invested capital
1.5% on committed capital during investment
period, thereafter, 1.5% on invested capital
1.5% on committed capital during investment
period, thereafter, 1.5% on invested capital
1.5% on committed capital during investment
period, thereafter, 1.5% on invested capital
Carried Interest20% of profits after 9% preferred return;
60/40 catch-up
20% of profits above 9% preferred return; 80/20
catch-up
20% of profits above 8% preferred return;
80/20 catch-up
20% of profits after 9% preferred return;
50/50 catch-up
Advantages
▪ Significant alignment of interests
▪ Scale and expertise to invest in large deals
▪ Solid track record with few losses of capital
▪ Fee holiday would save SURS $262,500 in
management fees
▪ Successful, 18-year track record
▪ Significant alignment of interests
▪ 90% of team at Carlyle for more than decade
▪ Unique strategy (supplying operator capital)
▪ Smaller investments, less competition
▪ Ability to share in carry on GP co-investments
▪ Not vertically integrated, providing better deal flow
▪ Solid track record/no funds have lost capital
▪ Strong alignment from Crow Holdings
commitment
Concerns
▪ Several pools of real estate capital/potential for
conflicts
▪ Potential conflicts (fees) from being vertically
integrated
▪ Many expected investments/impact on resources
▪ Debt limit at Fund level, but not at asset level,
potential for cross-collateralization
▪ Potential for headline risk
▪ Less control in decision-making process
▪ Significant team turnover in 2014/key person risk
▪ Solid track record, but no realizations from Fund
III yet
▪ Only one office, which could lead to more reliance
on local operating partners
▪ Debt limit at Fund level, but not at asset level,
potential for recourse debt
* Terms and fees are based on a $35 million commitment
Oth
er
Term
s / F
ees *
Str
ate
gy / P
rocess, C
on
t.Exhibit 4