When Roger Orf moved to London from New York in 1990, the first thing he did was hit Savile Row. Nearly 15 years later, the man charged with bringing Goldman Sachs to Europe still uses the same tailor – and it shows. His three-piece suit is immaculate, right down to the half millimetre sliver of shirt cuff visible at the wrist and the crisp, white square-fold handkerchief in his breast pocket. “I have a guy,” says Orf in his Mid West-meets-Manhattan drawl. “He does all my suits. It’s important. It is certainly an important part of business.”
The managing director of Apollo Global Management International is blessed with a trio of qualities often only found together in American high-flyers – the accent, the attitude (positive, of course) and the ambition. Otherwise known as the holy trinity of authoritative confidence. But when it comes to his work and investment activity, he has been almost entirely focused on Europe since the mid-1990s. It is a healthy mix, he says. Some good old US of A positivity to light a bit of a fire under the real estate world on a rather more slow-moving continent. And his newest role as European chairman of the Urban Land Institute – a non-profit research organisation supported by members and focused on creating a forum to discuss land use and global property – will give him ample opportunity to continue the shake-up.
In his first interview since the appointment last month, Orf explains how he plans to emulate the ULI’s US success on this side of the pond – despite his total lack of foreign language skills – and calls the bottom of the European property market.
Three-point plan
The ULI chairmanship is the most recent in a long line of key roles outside of the US for Orf. From head of European real estate at Goldman Sachs in the 1990s to running European operations for Lone Star in 2004 to overseeing Citigroup’s European real estate investments in his current role, his days in the US seem a long way away: “I don’t miss much about the States these days. Maybe Oreos. But I can get people to send those. I used to miss the level of service. But the UK service industry has really caught up over the last quarter century. Plus we have mobiles now so I don’t ever need to deal with a national telco again.”
Craving American cookies aside, Orf couldn’t be more ensconced in the European property world. He is responsible for investing £500bn on the continent in the past six months alone. A move that, he says, is his bet on the bottom of the market. But more on that later. First, he discusses the daunting task of elevating the somewhat forgettable reputation of the ULI across Europe.
“I have supported the ULI since 1985 and the key for me will be ‘Europeanising’ what was a uniquely American institution 50 years ago,” he explains. “Luckily I have some experience in this area. I did it with Goldmans and now I want to do it again.”
He has already set out a three-point plan for how he will achieve this: working on revitalising membership to appeal to younger people – “the ravages of the recession has thinned us out a bit”; building up a network of “mayors” or public officials who will work together to spearhead the ULI across major European cities; and an overarching mission to change perceptions of what Orf considers an underused tool outside of the US.
“If you are English and in property and you think of a representative body, you think RICS or BPF. I want to try to help people see that the ULI can coexist peacefully alongside these organisations. It is not a zero sum game,” he says. “Jeremy Newsum is a past ULI chairman and a former BPF president, for example.
“What distinguishes us is that we are not a lobbying group. We are a tool. We raise awareness and have the power to bring different strands of the European property market together through conferences, publications and research. So much of this is vital to our industry. Particularly across a continent that has the disadvantage of a lot of different languages, cultures and interests compared with the States, where it is easier for people to get together behind an organisation like this.”
Four languages
Orf admits that pulling together different European cultures will be one of the major challenges in his new role, only made worse by his grasp of languages, or lack thereof. “I speak four languages: Eastern, Western, Mid-Western and Southern,” he laughs.
In all seriousness, he adds that while the language barrier might be a challenge, it is not insurmountable: “Americans are naive when it comes to this sort of thing and it is true, we haven’t always done a good job when it comes to cultural sensitivities, one of which would be learning languages. Of course it would help and show greater understanding of each individual culture, but in reality English is a universal language in business. And we have a multilingual staff base to support us on the ground across Europe.”
Wider challenges
And when it comes to understanding the intricacies of the European real estate sector, what Orf lacks in linguistic skills he makes up for in financial expertise.
“There are several challenges,” he says. “One is capital structures. We [Europe] are still deeply underwater in debt terms relative to equity and cleaning all of that out, whether it’s in Spain or Ireland, will be a long process. Maybe five years. And it is still early days. Then there is the issue of growth. Many countries are still shrinking and it is very hard to grow real estate values if your population and your employment base is reducing and if people are leaving. So addressing growth and moving away from austerity will be extremely important, because where there is growth, there will be development.”
There is some good news, however. Orf points to Apollo’s recent investment activity as a sign of expected positivity on the horizon: “In the UK and Ireland it has gone from bottoming to improving in the past year. We have been buying a lot of offices in the South East and a lot of London rented residential. With every passing month, we see an improvement in rents, values and growth. And the same in Ireland, though it is off a very low base.
“On the continent it is still a bit too tough to point to anything specific, but there is a general improvement. I think what is happening in real estate terms is a bottoming out. We have invested €500m (£428m) of equity across Europe in the past six months, which is a bet on the bottom. I have a friend buying up any type of resort or leisure property pretty aggressively in Spain right now. And he is an astute guy – again, indications of the bottom. Things will brighten. Slowly. We are never going to be China. We are gradually cleaning out some of our problems, but in a very European way. It will take time. In two years things will be better. In four years we will be back to a decent return on investment. But it’s not like the US. It won’t happen overnight.”
Another American-in-Europe reference and one that spurs Orf on to admit he wants to bring some of his native “deep rooted optimism and boundless energy” to the market. “People can be cynical about American enthusiasm, and rightly so. We have made mistakes. A lot of mistakes actually and in foreign theatres. But that ‘can do’ attitude is ultimately a good thing – particularly in real estate development, when you need to push things forward to get stuff done. That is what I hope to achieve for the ULI.”
It may take the accent, attitude and ambition of an American to make things happen, but Orf will be harnessing the power of this holy trinity dressed as a true Englishman.
