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Real Estate: Venture Capital Fund Management


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Real Estate: Venture Capital Fund Management

  1. 1. Real Estate: Venture Capital Fund Management
  2. 2. “Palmer Capital Partners is unique. Our business model has never been replicated elsewhere within the industry. Through the provision of financial support, expert guidance, advice and unrivalled experience, we provide a clear path for each of the companies we back to follow in order to achieve their goals.” Introduction 02 History and Philosophy 04 Directors 06 PCP Europe 09 Venture Capital 10 Fund Management 12 Portfolio Work 17 Key Facts 19 PCP backed companies: Wrenbridge Land 20 Frontier Estates 20 Opus Land 21 Danescroft Commercial Developments 21 Thistle Land 22 Cubex Land 22 Cantium Developments 23 Walbrook Land 23 Principal Corporate Investments 24 p1
  3. 3. Palmer Capital Partners Venture Capital Fund Management Wrenbridge Palmer Capital Frontier Development Fund Opus Palmer Capital Development Fund II Danescroft Thistle Palmer Noble Fund Cubex Palmer Active Value Fund Cantium Palmer Active Value Fund II Walbrook Frontier Key Fund Introduction “We invest in people and companies which are going to be leaders in their field. We are only interested in producing best in class property companies.” Palmer Capital Partner’s (PCP’s) unique PCP has evolved to become one of This has made PCP one of the most strategy is to identify and nurture the the largest and most active commercial active financiers of property projects outstanding start-up companies of today property groups, on average involved in the UK. With the opening of its to ensure that they become the leading in over 100 schemes in the UK alone, continental European offices in Munich, property entrepreneurs of tomorrow; with a gross completed value in PCP is replicating this success in providing them with access to seed excess of £3 billion. mainland Europe. capital and project finance, and to the skills and expertise necessary for As PCP has grown, its business continued growth. model has matured to incorporate fund management and corporate finance, In the UK, PCP has backed and both of which complement the continued continues to support eight property growth and success of the venture companies, all of which were start-ups capital business. Its venture capital and or early-stage businesses when the initial fund management divisions allow PCP investment was made. Across Europe, to raise finance, invest in projects carried PCP is backing further property out by the property companies and companies and asset managers, with structure and execute large-scale a view to building a comparable platform property transactions. from which to leverage growth. p2 p3
  4. 4. “PCP is all about people. Identifying and developing the right people - and backing them for the long term.” History and Philosophy Past Future The concept was simple - to invest However much PCP grows and in people investing in property. When develops, some things will never PCP was created in 1992, it laid the change: its focus on, and commitment foundations for a business model that to, the companies it backs. Every year is still unique within the commercial it examines and considers as many as property sector. Since its inception, the 50 companies in order to identify the PCP business philosophy has been one one that has the greatest potential to of creating wealth through helping others become the best in class. Once selected, to realise their ambitions. PCP works alongside the company to forge a partnership of strength Present and cooperation that enables Over recent years, PCP has created it to outperform its competitors a financial services business to work and realise its founders’ ambitions. in synergy with its venture capital arm. The company manages a number of development and investment funds, investing primarily through its eight regional property companies, offering both institutional and private investors a unique diversity of investment opportunities across management teams, geographic regions and commercial property sectors. p4
  5. 5. Directors Rupert Sheldon Director Alex Price Chief Executive Ray Palmer Chairman and Founder Guy Barker Managing Director (Europe) Christopher Digby-Bell Deputy Chairman “When PCP approached me, I felt “Our job is to help other people “We believe that our business model “PCP identifies and backs the best “I was brought up to believe that that they had something to offer that make money and be the partner is not only unique in the UK, but professional teams in the real estate leadership is earned, it is not bestowed.” no other business in the property in their success; that has been across the world.” industry. This model combined with arena could.” PCP’s underlying philosophy for the focus and motivation it creates As a former Managing Partner over 15 years.” Ray has specialised in development is in my opinion the future for of Taylor Joynson Garrett and A Chartered Surveyor, Rupert started and investment for over 30 years, starting property fund management.” International Managing Partner of Frere his career at Gooch & Wagstaff Colliers Alex started his financial career with his career at Lambert Smith & Partners, Cholmeley Bischoff, Christopher has CRE, focusing firstly on agency and Credit Lyonnais Securities in 1997, serving as its Chief Executive and guiding A Lawyer and Chartered Surveyor more than 30 years’ experience as a then commercial investment. then completed an MBA at London its sale to Abaco. He stayed on as the with over 20 years’ experience in real estate lawyer and has twice been In 1996 he joined Henderson Global Business School before joining Sabre Chief Executive and masterminded pan-European property fund elected as a member of the Ruling Investors where he initially co-managed Holdings’ European Corporate Finance a series of acquisitions, culminating in management, Guy trained at Knight Council of the Law Society. In 1998 two UK property funds on behalf of team. He joined PCP in 2003, initially the creation of Lambert Smith Hampton, Frank in London before going on to he left private practice in order to join German Institutional investors, prior to charged with creating the fund one of the UK’s top five agencies. establish their German operations. PCP where he oversees legal and being appointed Fund Manager of the management business within PCP. In 1991 he led a management buy-out After joining Hypo Vereinsbank AG transactional services. £250 million Henderson UK Property In 2005 he was voted Property before resigning in 1992 to found PCP. (HVB) in Munich as Head of Real Fund. He became a Henderson director Week Young Property Personality Estate Asset Management, he in 2003, before leaving in 2005 to join of the Year. He was promoted to became Head of Fund Management PCP and oversee the Active Value Funds Chief Executive at the start of 2008. for INVESCO’s European real estate and wider fund management activities. operation (IRE) and European Chief Executive Officer in 2005. He joined PCP in 2007 to expand their business across Continental Europe. p6 p7
  6. 6. PCP Europe “Every local market in Continental Europe has its own characteristics. They all have different property and corporate laws as well as a different business language and business culture. The only way to ensure success is to adopt an approach that is tailored to each case and reflects these individual nuances.” Established in Munich in October 2007, As well as the fund management arm PCP’s first Continental European PCP is rolling out its venture capital office represents the next stage in the business model, carefully investing company’s evolution. Bringing together in start-up and early-stage property the strength of the existing business businesses in each economic region. model with the unrivalled pan-European This combination of existing expertise investment track record and and nurtured entrepreneurial potential Guy Barker understanding of an experienced team, provides a uniquely informed access its aim is to replicate the philosophy to the less transparent markets and will and success of the UK operations. further mitigate specific risks for investors in Germany, the UK and across Europe PCP’s initial focus has been on developing seeking cross-border opportunities a property fund management arm for and market penetration. German institutional clients, servicing their requirements across the Continent PCP’s first European funds are Ralph Andermann through a series of partnerships from scheduled for launch in 2008 with Paris to St. Petersburg. investment due to commence before the end of the year. These funds will include a UK Core Plus fund for German institutional investors and a Pan European farmland fund. Tina-Katherin Rauh p9
  7. 7. Venture Capital “The venture capital side of PCP is about building businesses. We have the experience and the resources to help them achieve their potential.” As the leading property venture capital The provision of strong non-executive company, PCP combines its financial management also aids the filtering substance, experience and intellectual and de-risking of investment and capital with the energy, enthusiasm and development projects. The property market presence of young property companies benefit from access to companies. Working in partnership, guidance and resources not usually PCP and the PCP backed companies available to a small business. The result are able to identify development and is that companies supported by PCP investment opportunities, secure are able to grow more quickly, more finance, undertake projects and profitably and more securely. consistently deliver high returns for the companies. The PCP model is to provide these companies with start-up capital, management expertise and an active non-executive role, in return for a 33.3% shareholding. PCP then provides an on-going range of services including property, financial and legal expertise, assisting the structuring of deals, sourcing finance and helping with negotiations and management issues. p10
  8. 8. Fund Management “An investor with PCP is accessing eight different companies, all of whom are experts in their local geographic areas. We are the route into the local markets, where local expertise will make the best returns.” Having established a strong network of PCP’s fund management arm: Combining the aggressive property companies with access to deal - provides fund investors with access entrepreneurship of its property flow and a track record for delivering to a portfolio of development or actively companies with solid fund management exceptional growth, PCP launched its managed investments which have skills, PCP offers a diverse spread of first commercial property fund in 2004 regional, company and sector projects that seeks to reduce specific and now has circa £750 million of assets diversification. risk while offering higher returns. under management. - provides the companies it backs with PCP aims to manage a range of funds funding for quality projects. from core plus to opportunistic investing in real estate in the UK, Continental PCP funds benefit from regional spread Europe and across Asia. In 2008, and local market penetration, through PCP invested in Asia Capital Partners, investing in property opportunities a start-up fund management business sourced by the PCP backed companies. investing in China and India. Each fund has a geographic spread of projects, which covers a range of commercial property sectors, such as office, retail, industrial and leisure and may also include mixed use schemes. p12 p13
  9. 9. PCP funds include: The Palmer Capital Development The Palmer Active Value Fund and Fund and the Palmer Capital the Palmer Active Value Fund II Development Fund II - Launched September 2005 and - Launched September 2004 and March 2006 October 2006 - £275 million investment in actively - £400 million for UK commercial managed property investment property development projects opportunities The funds provide institutional investors The funds allow institutional investors with access to a diversified range of to source properties via the companies developments project-managed by PCP backs, with asset management some of the best regional property being carried out at a local level on companies in the UK, typically with an a highly incentivised basis. end value of £5 million to £30 million. The Frontier Key Fund is a joint venture The Palmer Noble Fund between Frontier Estates (backed by - Circa £10 million raised from PCP) and The Trustees of the Chubb a range of private investors Common Investment Fund - Closed June 2005 - £100 million fund Sponsored by Noble & Co, the fund - Opened in 2000 invests £1 million to £5 million in - Invests in schemes sourced and commercial property development managed by Frontier Estates opportunities across the UK, sourced These schemes tend to be mixed use by PCP backed companies. or planning gain opportunities with an average end value of £20 million plus. *PCP operates its regulated activities through Palmer Capital Investors Limited, an FSA regulated company p15
  10. 10. Portfolio Work “We want to remain a pro-active, fleet-of-foot business that can react quickly to opportunities. That’s why the venture capital and fund businesses are entirely complementary - they give us the right platforms in the right markets.” Allied to its fund management arm, This unrivalled ability was demonstrated PCP has combined its property when PCP, in partnership with Deutsche and financial expertise to allow it to Bank, undertook a leaseback deal with both finance and carry out large scale Somerfield. PCP acquired a portfolio developments and development-based of 105 petrol filling station sites from portfolio sale and leasebacks. Texaco and then leased them to Somerfield on 20-year fixed uplift leases. PCP’s strong reputation has made PCP backed companies were responsible it possible to structure joint venture for redeveloping the sites from their arrangements with several leading existing traditional kiosk format into institutions, including Cargill, Schroders, larger Somerfield convenience store GE Capital and the Royal Bank of formats. The project has a completed Scotland. This enables PCP to take development value of circa £200 million, full advantage of corporate finance and and was one of the largest “sale and financial advisory opportunities before leaseback” development deals in the other companies in the marketplace UK in recent years. realise their potential. p17
  11. 11. Key Facts 6 Funds managed by PCP 100 Over 100 deals ongoing £750m Funds under management 8 PCP backed 46% £3bn Annual profit growth Ongoing development property companies (GAER 2004-2007) & investment programme p18 p19
  12. 12. Wrenbridge Land Opus Land Founded in 1993 and run by Peter “For me, PCP provide three things: grey When Richard Smith and Andrew Today, Opus Land boasts a portfolio Jarman, Jamie Hockaday and Ben Coles, hair, gravitas and money. PCP are smart, Duncan decided to sell their successful of some 3.5 million sq. ft. of commercial Wrenbridge Land was the first company intelligent guys and we tap into their skills surveying business based in Birmingham development and investment property, to receive backing from PCP. as a business resource. They have simply and Leeds to become developers and with a value in excess of £550 million, enabled us to make more deals and make investors themselves, they turned to an achievement that Smith puts down Today, the Cambridge based company them quickly, mainly because they trust PCP for financial support and guidance, to a combination of energy and industry has a portfolio of over 5 million sq. ft. of and understand us and we trust and Peter Jarman Jamie Hockaday as Smith recalls: “I had known Ray Palmer knowledge: “PCP’s experience is vital to Richard Smith commercial and mixed-use schemes and understand them,” adds fellow director, for some time and had seen how PCP our success, it helps us identify potential specialises in distribution, industrial, office Ben Coles. had helped both Wrenbridge and Frontier.” obstacles before they become real and business park development. These problems. However, it’s balanced by the include several IAS/OAS award-winning With PCP as a partner since the company’s entrepreneurial will and the ability to make projects such as Cambourne Business formation in 1999, Opus Land has deals happen which you need if you’re Park (Cambridge), Stratton Business Park, become one of the largest and most going to beat the competition,” he says. (Biggleswade), the Big Berry Distribution successful development companies in Park (Droitwich) and Apex House Ben Coles the West Midlands, Yorkshire and the Andrew Duncan (Birmingham). North East. “We are passionate about the built environment and are driven to “PCP’s input has helped us to achieve provide buildings that create a sense significant recognition from the industry of place for the occupier, that really are as the commercial developer of choice in a pleasure to work in,” says Smith of the the Eastern Region with a track record of Opus Land business philosophy. professionalism, high-quality product and performance,” says Peter Jarman of the company’s continued success. Frontier Estates Danescroft Commercial Developments Chartered Surveyors Adam Eldred and Frontier currently has a commercial Concentrating primarily on the Midlands The depth of these abilities was aptly Andrew Crowther founded Frontier development programme of some and south of England, Danescroft demonstrated in 2006 when Danescroft Estates in 1996. Based in Milton Keynes, 5 million sq. ft. with a completed value Commercial Developments has focused acted as lead development manager Frontier specialises in the industrial of circa £1bn. Current schemes include on mixed-use, local/district centres and on the Golden Gate portfolio, overseeing warehouse and office sectors as well The Hub in Milton Keynes, which was healthcare schemes since it was founded the transformation of 105 petrol filling as mixed use developments. recently opened by the Queen, a £400m in 1996 by David Civil. Operating from stations and continues today with new City Centre Quarter comprising four Adam Eldred offices in London, the company has the recent completion of the iQuarter, David Civil Already one of the UK’s most active and three star hotels, 500 residential displayed considerable expertise in a 200,000 sq. ft. business park in Rugby. and successful commercial property apartments, 200,000 sq. ft. of top quality working with existing landowners and companies, Frontier recently launched offices, a conference centre and 50,000 occupiers in order to maximise the “PCP’s investment in Danescroft is so Frontier Homes, a residential sq. ft. of retail space. development potential and the value of much more than financial. They have development company focused on their property assets, whether through invested, and continue to invest the time, optimising value from Frontier’s growing “The support provided by everyone outright purchase, subject to planning, intellect, experience and reputation residential portfolio. at PCP has been invaluable. It has joint venture or profit-related needed for our company to succeed helped to realise our vision and turn Andrew Crowther management fees. and continue to grow.” David Civil. Frontier Estates from an idea into the respected and dynamic business it is today.” Adam Eldred. p20 p21
  13. 13. Thistle Land Cantium Developments Started by Eric Petrie in 2000, Thistle “The biggest challenge you face as a Established in 2006 by Chris Boulter with “I learned about PCP through friends Land has wasted no time in cementing start-up company is trying to make the aim of building links with the regional within the industry and their input and its reputation. Across the South East multi-million pound property acquisitions, business community and becoming one support has given us a gravitas and of England the company is regarded but with PCP’s wide-ranging experience, of Southern England’s leading property respect within the sector that we would as an expert at managing the types of profile and reputation within the industry, companies, Cantium Developments otherwise have struggled to gain by any complex schemes that require a range Thistle Land has been able to overcome quickly built up a significant track record. means other than through many years of property development expertise across this sizable obstacle and establish itself Eric Petrie With PCP’s support, the company was of successful trading.” Chris Boulter. Chris Boulter all sectors. Petrie heard about PCP as a leading business in its geographic able to make a string of early acquisitions, through a profile in Estates Gazette and region and commercial property sector.” securing a development and active through a combination of his 25 years Eric Petrie. management portfolio extending to over property experience and PCP’s financial 600,000 sq. ft. and with a capital value strength and guidance, the company has in excess of £150 million. What’s more, completed, in a Joint Venture with Frontier a substantial element of the company’s Estates, two mixed-use schemes in current work in progress is situated Watford and Hatfield with a combined within the rapidly expanding Thames value of £200m. Gateway, widely regarded within the industry as being home to one of the Thistle Land’s largest current venture most exciting social and commercial is a 54 acre mixed use scheme in projects in the world. Swindon. Its Joint Venture partners include RREEF, Gaming International and Uxbridge Properties. Cubex Land Walbrook Land Founded with the ambition of creating “The backing of PCP was the catalyst Founded in 2004 by Peter Walford, Josh “As well as drive and determination, a £250 million portfolio of short- to for realising our ambition of starting our Roberts and Gavin Bridge, Cubex Land the key to success is to surround medium-term development and own business. Their financial support is based in Bristol with a focus on projects yourself with people who can give you investment stock, Walbrook Land was and depth of experience gives us serious across south Wales and the south west the right advice, even if it is not what you created in 2006 by Tim Stotesbury and firepower.” Tim Stotesbury. of England. Frustrated by working for want to hear at the time. PCP’s directors James Rawlings, two well-respected the property arm of a utility firm, they have always been excellent sounding figures in the industry with a track record Tim Stotesbury approached PCP. “We knew we had the boards for our company. They are really Gavin Bridge Peter Walford of securing profitable commercial ability within ourselves to succeed, all we active non-executives who encourage property deals within central London. needed was the financial and confidence us never to curb our ambition and who Through a combination of the founders’ boost that PCP provided and continues provide the most sage-like business local expertise and PCP’s support and to provide today,” says Gavin Bridge. insight,” says Bridge. guidance, the business has already beaten serious competition in order With PCP in their corner, Cubex has to acquire three of London’s landmark already built up a diverse portfolio of buildings: 154-156 Fenchurch Street, James Rawlings development projects including a 23-acre Josh Roberts London EC3, 2 Copthall Avenue, London site that is set to become Bath’s first EC2 and 10 Lloyds Avenue, London EC3. out-of-town campus business park and the £35 million Paragon grade A office development in Bristol, the acquisition of which Bridge believes to be the company’s greatest achievement to date. p22 p23
  14. 14. Palmer Capital Partners Palmer Capital Investments GmbH Time & Life Building Maximilianstrasse 35 a 1 Bruton Street 80539 Munich Mayfair, London W1J 6TL T: +44 (0) 20 7409 5500 T: +49 (0) 89 2421 8533 F: +44 (0) 20 7409 5501 F: +49 (0) 89 2421 8200 Principal Corporate Investments Wrenbridge Land Opus Land Cubex Land Mill House 49 High Land The Coach House Mill Court Henley-in-Arden 26 Oakfield Road Great Shelford Solihull Clifton Cambridge West Midlands Bristol CB22 5LD B95 5AA BS8 2AT T: +44 (0)1223 845 845 T: +44 (0)1564 794 008 T: +44 (0)117 973 4000 F: +44 (0)1223 845 844 F: +44 (0)1564 794 009 F: +44 (0)117 973 4020 Reg No: 2876074 Reg No: 3404662 Reg No: 5179869 35 Brook Street Frontier Estates Ilkey Cantium Developments Sunningdale House LS29 8AG Cantium Lodge 37 Caldecotte Lake Drive 23 Farncombe Road Caldecotte Business Park T: +44 (0)1943 850 013 Worthing Caldecotte F: +44 (0)1943 850 029 West Sussex Milton Keynes BN11 2AY MK7 8LF Danescroft Commercial T: +44 (0)1903 218 506 T: +44 (0)1908 238 888 Developments F: +44 (0)1903 212 471 F: +44 (0)1908 241 111 Time & Life Building E: 1 Bruton Street Reg No: 5737525 Reg No: 3160388 London W1J 6TL Frontier Homes Walbrook Land Sunningdale House T: +44 (0)20 7409 5522 Time & Life Building 37 Caldecotte Lake Drive F: +44 (0)20 7409 5501 1 Bruton Street Caldecotte Business Park London Caldecotte Reg No: 3734319 W1J 6TL Milton Keynes MK7 8LF T: +44 (0)207 409 5529 Thistle Land F: +44 (0)207 409 5501 T: +44 (0) 1908 238 888 Time & Life Building F: +44 (0) 908 241 111 1 Bruton Street Reg No: 5906531 London Reg No: 4738034 W1J 6TL T: +44 (0)20 7409 5525 F: +44 (0)20 7409 5501 Reg No: 4040751 Designed and produced by Cooper Rose 020 7935 4084 p24
  15. 15. Palmer Capital Partners Time & Life Building 1 Bruton Street Mayfair, London W1J 6TL T: +44 (0) 20 7409 5500 F: +44 (0) 20 7409 5501 Palmer Capital Investments GmbH Maximilianstrasse 35 a 80539 Munich T: +49 (0) 89 2421 8533 F: +49 (0) 89 2421 8200