Madison International Realty, the US-based investment manager that specialises in injecting capital into existing real estate investments, is establishing an office in London and has hired former Lehman Brothers professional Sean Kelly-Rand.
Kelly-Rand will be responsible for sourcing investment opportunities from the real estate markets in the UK and Ireland by working with existing investors looking to exit investments or introduce more liquidity.
Madison, which already has an office in Frankfurt, Germany, said the establishment of a London outpost reflected the significant potential for distressed situations and opportunities to introduce fresh equity.
Last week, the Employees Retirement System of Texas revealed it had made a $60m (€43m) commitment to Madison’s International Real Estate Liquidity Fund IV, which focuses on the US property market, but has the ability to invest a portion of its capital in the UK and western Europe.
Ronald Dickerman, Madison founder and president, said: “We felt it was the appropriate time to expand, as we are experiencing heightened demand from existing core real estate investors for the kind of exit strategies we offer.
“With the delay in property sales, numerous sponsors are looking to provide their existing investors with an exit event without selling the underlying properties or portfolios, amortise maturing debt with equity, restructure or recapitalise, or sell a minority ownership position so they can monetise some of the embedded equity.”
Kelly-Rand has been made director of the London-based arm after having worked for Bell Capital Partners, a London-based financing boutique focused on arranging subordinate capital for European real estate transactions.
In this position, he analysed transactions across Europe, including commercial properties and fund level recapitalisations and restructurings.
Previously, at Lehman Brothers, he analysed, underwrote and structured principal equity, bridge equity, mezzanine and senior debt transactions across Europe.
“From our new London platform, Sean will continue to build relationships with existing property owners and intermediaries and communicate Madison’s investment strategy to facilitate future transactions,” Dickerman added.
Madison’s London investments to date include the Devonshire House, a 10-storey, 186,472-square-foot trophy office building in London’s West End overlooking Green Park and Buckingham Palace.
Madison acquired a 17.5% ownership interest, providing liquidity to a distressed financial institution seeking to sell down a portion of the equity on its balance sheet, investing approximately $38.6m in the property.
Other Madison portfolio investments include the Chrysler East Building at 666 Third Avenue, the Colgate-Palmolive Building at 300 Park Avenue and 520 Madison Avenue in New York City, as well as the Falk Group office and medical portfolio in Munich, Rhineland-Pflaz and Nürnberg, Germany.