Real Estate focused hedge funds
I've seen threads on this, but they are quite outdated at this point.
Was wondering if anybody could provide current examples of real estate focused hedge funds, similar to what Land & Buildings does. Pretty niche area so difficult to find these without direct knowledge of them.
Snow Park Capital is one.
Hopefully you’re not an attractive girl though, because the founder sexually harassed their CFO. Of course, it was “settled in arbitration” AKA threw enough money at the situation to make it go away
Land and Buildings.
It is a thin group...
Baupost - I believe they sold much of the RE holdings... but dont hold me to that
Och Ziff - they renamed to Sculptor or something I think. I've heard the real estate group is really really sophisticated and good people although broader culture there is questionable.
Is Brandywine considered an HF? Not sure, they also sold a lot of their stuff. Made some pretty massive bets at the bottom in 08/09 if I remember correctly.
If you mean Brandywine Realty Trust, they're a REIT. They also have development and property management arms, so not a hedge fund by any means
Bracebridge Capital, LibreMax Capital, and MP Securitized Credit Partners all do at least some real estate investing.
OP - curious about the root of this question? Very small universe if your goal is to work at one of these groups and their day to day is not dissimilar to other RE groups.
Idk about OP but when I think of hedge funds, I think of public securities. Och Ziff is technically a hedge fund, but their real estate group invests Private Capital just like any PE fund so I wouldn’t count them.
Public RE Equity / Credit and private placements into public companies is pretty different from the standard REPE job where you buy or finance buildings
Och Ziff has the flexibility to invest in private/single assets as well as public REITs. There was a WSJ article published recently as well that referenced Och Ziff buying shares of public REITs due to attractive valuations over private assets
Largely this crisis has made me realize the importance of a flexible mandate. If you don't have the flexibility to make the best investments at the moment you're simply leaving fat returns on the table. I want the flexibility of a fund that can make both private and public market moves when appropriate
Long Pond Capital H/2 Capital Partners (debt focused though)
Thanks for the comments all, appreciate it
Going off this topic anybody know the headhunters that are usually playing in this space?
1) Pure real estate securities: Long Pond, Snow Park 2) Real estate securities platforms: Cohen & Steers, Third Avenue (TAREX), Brookfield, LaSalle, Norges, APG, Madison Realty Capital, Heitman 3) Notable real estate investments: Elliott, Pershing Square
Farallon has a dedicated real estate group
Anybody know firms that do both private market and real estate securities where team members work across both?
Quite a few REPE firms will invest in public securities if the valuations are attractive. Starwood is an example of a firm which does this. They have taken an activist role in CA Immo an Austrian listed real estate company for example. Also for some large funds they will invest in public equities to 'complete' a portfolio. If you want to invest in data centres but dont want to scale up a platform for example.
However dedicated public equity groups focussing on real estate are managed in a very different way to what a REPE fund would be. Usually public REIT investment groups are benchmarked to the FTSE EPRA NAREIT Global Index or the NAREIT Index and aim to beat this benchmark by a certain amount - they are mostly relative value accounts.
Some are outcome orientated where they seek to provide a return of 6-8% over the long term with a higher income component to mimic physical real estate market returns but with added liquidity.
Finally there are some pods at MM hedge funds where traditional L/S market neutral strategies are run and there have been larger scale institutional products which do this also. CBRE Clarion still run a L/S strategy and BMO Asset Management also run one, Starwood used to run a product. But there is an issue in regards to liquidity for these strategies so they are not hugely economic. Hence the focus on bog standard relative value accounts.
Having worked in physical real estate and the public equities side, if you get real estate and get finance you can move between the two. Modelling on the equities side is focussed on 3 statement models and REITs are very simple to model.
Big dedicated real estate securities platforms: CBRE Clarion, LaSalle, CenterSquare IM, Heitman, Brookfield, BlackRock, Cohen and Steers, Janus Henderson, Principle, BMO AM, Morgan Stanley AM, JP Morgan AM etc.
What’s your opinion on Balyasny’s real estate platform? They’re hiring.
Also what’s your opinion on working in the public equity / hedge fund space long term (focused on REITs)? I get the feeling the hedge fund route is very high risk / reward compared REPE or RE debt funds. Is this accurate?
To clarify, I mean high risk / high reward in terms of career outcomes
This is very helpful thank you
Personally think public real estate is an underlooked way of getting exposure to the market. Some private real estate funds do have the mandate to invest in real estate related securities in their private funds and do take strategic positions in public listed REITs, e.g. Brookfield / British Land, Orion / Intu, Aermont / Unibail as well as the Starwood example above... Blackstone obviously do take-privates etc so they monitor the space as well.
As long as you can make your way around a balance sheet / P&L / CF statement, REITs are relatively simple and similar to looking at a private portfolio of assets (& taking into account any accounting nuances)
Not sure about how teams are structured at all of these, but a lot of the event driven/special sits/distressed hedge funds invest in private RE as well.
A lot of the big diversified investors do both too, though I'd bet more likely to have bigger more separate teams: - KKR - BX - Apollo - Oaktree - Ares - Centerbridge - Angelo Gordon
PGIM has a real estate mutual fund group. Someone asked about exit opps for real estate research group folks and this is one area I’ve seen moves.
https://www.pgim.com/pgim-investments/about/pgim-real-estate
Oaktree does real estate.
for public securities: long pond, vision, timbercreek, winter park, heitman, brookfield, origin
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