Greykite, the new investment firm launched by former TPG executive Michael Abel, is scouting the market for industrial, student housing and living acquisitions as the market enters ‘a unique point’ in the investment cycle.
'If we look at the vintages ahead of us, they remind me of the period between 2010 and 2011, which offered very compelling investment opportunities as a result of a large pool of motivated sellers post-GFC,’ founder Michael Abel told PropertyEU in an interview.
Greykite is in a fortunate position having completed its first closing with several hundred million of discretionary capital and a very flexible investment mandate. ‘We have no legacy issues or dual strategy distractions – we can fully focus on deploying our capital into these attractive vintages ahead of us,' added Abel.
Earlier this year the firm secured cornerstone investment from Capital Constellation, an investment platform managed by US-based group Wafra Inc., which is owned by the Public Institute for Social Security of Kuwait, and Leucadia Asset Management, the New York-based alternative asset management division of Jefferies.
Greykite is understood to have secured a total of $350 mln of equity commitments, making the raise the largest first close by a first time discretionary private equity real estate vehicle in Europe since 2016. Whilst Abel wouldn’t comment, the company is believed to be targeting multiple closings and over $500 mln of commitments, which, assuming around 60% leverage, would provide over $1.25 bn of firepower.
Greykite is structured as a typical UK fund manager headquartered in London, managing a fund domiciled in Luxembourg. Alongside Abel, the 10-strong team boasts Dan Valenzano, a former TPG colleague, as well as three recent hires from Goldman Sachs, Mike Bradford, Shelby Weiss and Nam Do.
The company is pursuing acquisitions in demographically driven real estate sectors such as residential, student housing, as well as industrial, according to Abel. ‘Due to our strong network we have been able to build, in a very short period of time, a significant and realisable pipeline and are progressing a couple of deals in particular. We won’t look at every European country, rather we are focusing on Germany and the UK, the most liquid and institutional markets, which will be complemented by investments in strong secondary markets like Spain for instance’ Abel commented.
On the student housing front, the firm is focusing on student cities with good fundamentals, primarily in continental Europe. Abel: ‘Student housing is a nascent sector in mainland Europe and we believe it has the right dynamics, including strong and growing demand, undersupply, potential for rental growth, and robust investor interest. We also like its counter-cyclical characteristics and there are a number of supportive structural changes driving secular demand.’
