Residential investment veteran David Christie is launching a new company, Matter Real Estate, to back SME build-to-rent businesses across the UK, Ireland and the Nordics.
The former head of real estate at private equity firm ESO Capital will target value-add and opportunistic ventures in residential and healthcare.
Matter will be spun off from ESO Capital, the long-term backer and co-owner of BTR developer Placefirst, Irish housebuilder Genesis Homes and Zest Healthcare.
It will partner with management teams in evolving sectors, with a special interest in single family housing rental.
Institutional scale portfolio
Christie told EG: “The philosophy of Matter is essentially identifying smaller assets that, if aggregated to scale, deliver very strong returns.
“We are building not only institutional scale portfolios, but with it we are embracing the operational needs that these portfolios require. We build out best-in-class management teams to drive value in the underlying real estate.”
Matter will no longer be a part of ESO Capital, but founder Alex Schmid will work closely with the new firm in a strategic role.
“The new business is a natural evolution of a company reaching a certain critical mass and wanting to grow significantly further over the coming years,” Christie added.
Christie joined the firm in 2015 after roles at Ares Management, CarVal Investors, Avestus and Doughty Hanson. He has grown a real estate team of seven, most recently adding Nicholas Bull, former transactions director at Civitas Housing Advisors.
At Placefirst, the division set up the in-house construction, lettings and marketing platform, funding expansion of a team of 15 to 60. It also funded the £610m portfolio, with 1,200 homes in development and 3,500 expected over the next three years.
ESO Real Estate backed Genesis Homes’ BTR strategy in 2019, with the equity and development finance to deliver 1,300 homes in five years, valued at €340m (£298m). It has also backed Ireland’s Zest Healthcare and its target to invest €100m during the same timeframe. The firm also has a South East affordable housing provider, St Arthur Homes.
Plan of attack
Matter will retain these clients and is on the hunt for new partnerships, each with a minimum initial portfolio value of £100m.
“We will continue to expand in two ways,” Christie said. “Firstly by making our underlying companies larger and facilitating their future growth. And, where we see complementary sectors in the UK, we will look to access those markets as well.
“We’ve arguably been ahead of the curve accessing and investing in single family rental. With that comes intellectual capital on how that UK market can operate and scale itself and we are very keen to expand on that, given the market opportunity and the increased focus on these kinds of sectors.”
The business is backed by institutional investors from the UK, Europe and the US.
“In the past 12 months the sectors that we are currently focusing on have become increasingly in the spotlight of many large-scale institutional investors,” added Christie. “The challenge for many is access to opportunities that meet a certain scale – that is what Matter is seeking to address.”
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