KKR hires a real estate guy
just thought this was interesting. we've all heard rumors but this is finally something concrete.
"KKR plans real estate investment drive after key hire
Kohlberg, Kravis & Roberts, one of the world's largest private equity firms with $61 billion of assets under management, is set to embark on a global real estate investment drive.
PERE can reveal that the New York-based firm, led by Henry Kravis and George Roberts, has hired former Goldman Sachs Whitehall Funds co-chief operating officer Ralph Rosenberg from Eton Park Capital Management to lead its efforts in the asset class and to build a team. He becomes the first dedicated real estate professional at the firm since its inception."
Interesting to see the rumors play out for once.
Does something like this send shockwaves through an industry like real estate? That is, knowing a firm like KKR is hiring the best of the best to swoop in and make it rain.
No, it just pisses off LP's knowing that another Megafund is entering the market to make auctions more crowded and destroy industry-wide multiples.
I know that TPG is starting to recruit for an Associate for their RE group but do you think KKR will look for one in this cycle?
I think they have to fill out with a few more snr people before they start hiring associates.
Does it send shockwaves? A couple weeks ago Tony James of BX said that RE was better performing than PE because of the leverage you can get. Ultimately the other guys see this. It is also a quick way to grow AuM which is an important growth metric now that they are public.
No shock-waves. Despite the fact that KKR didn't have a dedicated RE team before they already had substantial expertise in real estate and had historically made a number of investments relating to real estate / related companies. The fact that they may divide up the funds is just a way to increase AUM... Warburg Pincus, TPG, etc, that haven't historically had their own RE groups/funds (at least i don't think they have - certainly could be wrong) seem to be doing this as well. I've seen a few new Warburg hires in RE in HK lately....
It's been almost a year since the original post... What do people think of KKR's real estate efforts so far?
They were rumoured to be going after Nomura's real estate business.... Also they had announced a JV with Sino-Ocean, a developer, in China.
In this link from 8 months ago KKR's real estate guy discussed ideas they're working on: "... the firm was interested in investing in a workout situation with a major bank, a London development with one of the UK’s major developers, a sale and leaseback transaction and a transaction with a distressed borrower in Ireland."
http://www.perenews.com/Article.aspx?article=61540&hashID=DA306EF9B0A94…
Can't tell if any of these closed, or if it was just PR to get principals to approach them with these types of deals.
They don't have a dedicated fund yet, but have been looking to do smaller deals through various separately managed accounts, balance sheet capital, and KFN's capital.
For instance, according to KKR Financial's latest earnings release (KFN is generally just a co-investor in their deals, so actual KKR equity is likely bigger): "We also committed to deploy approximately $37 million through our commercial real estate strategy to acquire an interest in a family owned, but undermanaged super-regional Midwest mall comprised of approximately 1.5 million square feet on land covering 130 acres"
hello everyone, is it only a rumors ? or does it have any reality ? Thanks
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