Private Equity Real Estate. 11. Private Equity & Corporate Finance Conference 4. Juli 2012

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1 Private Equity Real Estate 11. Private Equity & Corporate Finance Conference 4. Juli 2012 Institut für Finanzdienstleistungen Zug IFZ Prof. Dr. John Davidson, CAIA Tel:

2 Background: SECA and Private Equity Real Estate Folie 2 Institut für Finanzdienstleistungen Zug IFZ Dr. John Davidson

3 SECA and Private Equity Real Estate ~20 % < 0.2 % Source: Lusenti&Partners, 13th Swiss Institutional Survey Folie 3 Institut für Finanzdienstleistungen Zug IFZ Dr. John Davidson

4 Investment Style: Where does PERE start and where does it end? Return >15 % return (70%+ Lvg.) % return (30-70% Lvg.) OPPORTU- NISTIC < 11% return (0-30% Lvg.) CORE CORE PLUS VALUE ADD Properties requiring redevelopment/ repositioning Leveraged multi-tenant property Development Low Low Substantially leased, stable single to multi-tenant property Long-term hold High Risk Dr. Stephan Kloess, Kloess Real Estate Folie 4 Institut für Finanzdienstleistungen Zug IFZ Dr. John Davidson

5 Differences between Private Equity and PERE? Performance Value Generation Legal Structure Investment Volumes Fundraising Benjamin Bauman, Investment Professional, SCM Folie 5 Institut für Finanzdienstleistungen Zug IFZ Dr. John Davidson

6 Why invest in Private Equity Real Estate? Developments in the field of Private Equity? Source: INREV Intention Survey 2010 Casper Hesp, Research Director INREV Folie 6 Institut für Finanzdienstleistungen Zug IFZ Dr. John Davidson

7 Opportunities in the field of PERE? Private Public Equity Private Equity Direct Indirect Public Equity Investments in listed real estate Debt Private Debt Direct (Mortgages, Mezzanine) Indirect investments (Private Real Estate Funds) Public Debt Investments in public real estate and mortgages (ABS, MBS, CMBS, etc.) David Bouch, EuroCapita Property Investors Folie 7 Institut für Finanzdienstleistungen Zug IFZ Dr. John Davidson

8 Agenda Private Equity Real Estate Time Theme Referent Introduction Prof. Dr. J. Davidson, IFZ Registration und Apéro Where does Private Equity Real Estate start and where does it end? Einführung PERE Differences between Private Equity and Private Equity Real Estate John Davidson, Hochschule Luzern Dr. Stephan Kloess, KRE Kloess Real Estate Benjamin Baumann, Investment Professional at SCM Q&A Auswahl von PERE-Fonds Coffee Break Stephan Kloess, KRE KloessRealEstate Developments in the field of PERE Casper Hesp, Research Director at INREV PERE industry in Opportunities in the field of PERE, David Bouch, Eurocapital Property Investors Claude Angéloz, Partners Group David Bouch, EuroCapital Property Investors Panel Discussion and Q&A (English) Q&A and, anschliessend Lunch Folie 8 Institut für Finanzdienstleistungen Zug IFZ Dr. John Davidson

9 Panel Discussion and Q&A Investor Interest: Everybody loves their home market Those investors which think about diversifying start to invest internationally by investing in core Europe. Is that the right strategy? Do you see differences in home bias? Has interest decreased/increased to invest in real estate due to financial turmoil? How do family office investment investment style differ in comparison to institutions (e.g. Pension Funds/Canadian Pension Fund) Debt versus Equity investments? Emerging Markets versus Developing Markets after financial turmoil Does timber, infrastructure, agriculture land belong to the real estate allocation? Benchmarking a real problem in the industry? Private Equity versus PERE Due Diligence: What is different? Who is more sophisticated and why? What can industry learn from each other? How will industry evolve? Influence from AIFM, small versus large manager, fees, club deals, etc. Folie 9 Institut für Finanzdienstleistungen Zug IFZ Dr. John Davidson

10 Inhalt PERE Kapitel 1: Einführung Private Equity Real Estate (Lucerne University of Applied Sciences and Arts) Unterschiede zwischen Private Equity (PE) und PERE (SCM) PERE Allocation (Henley Business School/Pacific Star) Performance measurement of PERE funds (Preqin) Kapitel 2: Due Diligence Process Erfolgsfaktoren bei der Auswahl von PERE-Fonds (Kloess Real Estate) Changing Industry Impact on Due Diligence (Swisslake) Kapitel 3: Wertschöpfung durch PERE-Fonds Where does a pan European fund manager add value? (MGPA) Ways of adding value in real estate in the Nordics (Sveafastigheter) UK residential value add strategy (Grainger) China Residential Strategy (ING) Brazilian Residential Strategy (VBI Real Investment) Wertgenerierung im US-Multifamily-Sektor (Sentinel) Kapitel 4: Wertgenerierung durch Intermediäre Wertgenerierung durch Placement Agents (Selinus) Wie Immobiliendachfonds (FoFs) Wert generieren (Capital Dynamics) Kapitel 5: Erfahrungen von Investoren mit PERE PERE-Investitionen einer Schweizer Pensionskasse (Migros-PK) Who s your neighbour in the fund (Generali) The Mid Cap Small Cap Advantage of private real estate funds (CBRE Investors) Current requirements of investors (AREIM) Kapitel 6: Opportunitäten, Herausforderungen und Trends Where does the industry have to adapt? (INREV) Industry in 2015 (Partners Group) Green Properties (Diener Syz Real Estate) Kotierte Immobilienanlagen (4IP) Infrastruktur (RREEF) Unternehmensprofile Folie 10 Institut für Finanzdienstleistungen Zug IFZ Dr. John Davidson

11 Inhalt PERE (1/2) Kapitel 1: Einführung PERE(Lucerne University of Applied Sciences and Arts), PERE versus PE (SCM) PERE Allocation (Henley Business School/Pacific Star) Performance measurement of PERE (Preqin) Kapitel 2: Due Diligence Process Auswahl von PERE-Fonds (Kloess Real Estate) Impact on Due Diligence (Swisslake) Kapitel 3: Wertschöpfung durch PERE-Fonds Pan Europe (MGPA) Nordic (Sveafastigheter) UK residential (Grainger) China Residential (ING) Brazilian Residential (VBI Real Investment) US-Multifamily-Sektor (Sentinel) Folie 11 Institut für Finanzdienstleistungen Zug IFZ Dr. John Davidson

12 Summary Private Equity Real Estate Private Equity Real Estate should include the whole investment range i.e. from Core to Opportunistic Debt and equity investments can be considered as Private Equity Real Estate investments Current market turmoil offers interesting investment opportunities SECA can build on synergies between Private Equity and Private Equity Real Estate Folie 12 Institut für Finanzdienstleistungen Zug IFZ Dr. John Davidson

13 Next Steps Seminar, 21st September 2012: Indirekte Immobilienanlagen Ausland, Thank you for participating! Prof. Dr. John Davidson Lucerne University of Applied Sciences and Arts Tel: Folie 13 Institut für Finanzdienstleistungen Zug IFZ Dr. John Davidson