INTERVIEW: Colony plans to deepen footprint in Europe

US asset manager Colony Capital is on the lookout for new investment opportunities in Europe in its bid to expand its presence on the continent, says new managing director of European investor relations Christophe de Taurines.

De Taurines joined Colony Capital in July. Based in the firm’s London office, he will be responsible for expanding its investor relationships in Europe and helping shape its European strategy.

De Taurines, who has French and American nationality, was previously CEO of Capital & Marketing Group, which he founded and which advised on and raised capital of over $20 bn (€17.8 bn) for alternative investment managers, including Colony Capital. Here, he talks to PropertyEU about his new role at Colony Capital.

PropertyEU: What made you leave Capital & Marketing Group, which you founded, for Colony Capital?
De Taurines: Colony Capital was the first client of Capital & Marketing and used our services in Europe regularly over the years, along with other alternative investment managers. It was a logical transition for me to join Colony at a time when the firm is expanding its footprint in Europe, as investor demands have increased in a tighter regulatory environment.

PropertyEU: What are the immediate priorities in your new role?
De Taurines: Colony Capital is focused on raising capital from European investors for its ongoing investment activities.

PropertyEU: Can you outline Colony Capital’s strategy for Europe?
De Taurines: Founded in 1991, Colony Capital is an alternative asset manager with around $19 bn of AUM worldwide. The firm has been active in Europe since 1995. As of September this year, we have completed 66 European transactions in real estate and real estate-related investments, totalling €11.8 bn of gross transaction value and €5.7 bn of equity invested since European operations were established. From the beginning of 2014 to September, Colony has completed 15 European transactions representing €1.4 bn of equity invested.

Colony has 14 offices worldwide including European offices in Paris, London, Luxembourg, Berlin, Rome and Madrid with more than 50 of the company's over 300 professionals working specifically in Europe. We have been active in Europe and will continue to invest more in that market, deepening our ties with various partners in its investment space, which includes institutional investors.

Colony’s current investment programmes concentrate on commercial real estate in Europe and the US. We seek control of our investments that are typically completed through two types of transactions:
• Acquisition of non and sub-performing loans, as well as real estate portfolios or single assets, owned by banks, insurance companies, or controlled by defeasance agencies;
• Origination of financing for real estate investors who require capital to reposition, develop, or simply acquire real estate assets and who have limited access to bank financing.

Colony focuses on privately negotiated mid-sized transactions, with capital deployment of $ 50-150 mln per transaction.

PropertyEU: Does Colony’s recent acquisition of a 50% stake in Hamburg Trust and the JV with Neinver form part of this strategy?
De Taurines: Yes, the acquisition of a significant stake in German fund and asset manager Hamburg Trust and the joint venture with Spanish mall operator Neinver are consistent with Colony’s strategy of deploying meaningful capital into Europe.

PropertyEU: Will Colony Capital be focusing on specific markets/sectors in Europe?
De Taurines: We have historically been agnostic in terms of sectors and geography, but tend to focus on commercial real estate, whether through debt or equity, and in deep, liquid markets.

PropertyEU: Can you say something about Colony’s capital sources? Is most of it US-based?
De Taurines: Colony Capital, Inc. is a publicly quoted company on the New York stock exchange, having attracted capital from the US and beyond. The fundraising efforts for the private funds are global and, as such, our sources of capital are geographically very diverse.

PropertyEU: Do you expect the current rush for real estate investments in Europe to continue? How long will it last?
De Taurines: Colony Capital is committed to deploying a meaningful portion of investible capital in Europe at a time when banks and other financial institutions are disposing of large portfolios of non- and sub-performing loans. A recent PwC report estimates there are over €1.9 tln of unwanted loans on the balance sheets of European banks, with €90 bn sold last year and an estimated €110 bn to be sold this year.