The European arm splits to pursue its strategy of co-investment and asset management with partners such as Lehman Brothers and The Baupost Group
The European arm of real estate investment bank The Greenwich Group has staged a management buyout to form limited partnership Catalyst Capital. The MBO was led by Julian Newiss, chairman, and Peter Kasch, its managing director.
Newiss said the move came under the increasing recognition that the bank’s European arm was performing a different role from its US and Asian counterparts. In the US and Asia, the group tends to act as brokers whereas in Europe it has evolved into an active co-investor and asset manager. “The activities in the US and Europe have been entirely separate disciplines for some time, and it had become increasingly logical for the two sides of the group to split into more coherent businesses,” said Kasch.
The asset management contracts for GGI’s £600m European property portfolio will be transferred to the new vehicle. Catalyst has the support of its former GGI co-investors which include Merrill Lynch, Lehman Brothers, JER Partners and The Baupost Group. One of GGI’s most recent deals was to acquire UK property company Bourne End, which has £170m of assets, in conjunction with Merrill Lynch and Fog Cutter Capital.
It also teamed up with Lehman Brothers and Baupost to buy a £96.5m portfolio from UK company MEPC.
In its new guise, Catalyst will continue to originate deals in which to co-invest with investment partners as well as sourcing any senior debt raised from UK or continental European lenders. It also takes on the asset management of the investments. Newiss said it was increasingly being approached by investors looking to bring an asset manager on board. He added that Germany, France and Italy would be key markets for Catalyst.
