The low hum of constant chatter fills the bar at Berlin’s Hotel Adlon Kempinski. The venue for this year’s European Public Real Estate Association conference is awash with delegates networking against the impressive backdrop of its famous elephant fountain – a 10ft high structure in the centre of the lobby.
In the midst of the bustle, Meka Brunel cuts an elegant figure. The Franco-Persian is executive vice-president of the European real estate investment business Ivanhoé Cambridge, owned by the Caisse de dépôt et placement du Québec pension fund. A big title for a big job. Brunel is responsible for steering the billion dollar-plus European business as it invests in the development and acquisition of prime real estate across the Continent.
Here she takes some time out from the conference chaos to reveal her ambitious growth plans, but not before talking about the main reason she is here at EPRA – to debate strategies for getting a greater number of women in business into operational executive positions.
Confidence building
Run in conjunction with business adviser McKinsey, the scheme Brunel is in Berlin to endorse aims to mentor women in business into executive roles. And her first point is shocking – no UK company has taken up the chance to be involved in the programme.
“I would like to have many more English companies joining the programme as the others showed a lot of enthusiasm,” she says. “It doesn’t need to be only from the listed sector, but also the non-listed.”
Given the UK’s poor diversity track record – 17% of the industry revealed they felt discriminated against in the workplace in the latest Estates Gazette salary survey – this lack of engagement is cause of real concern. Not least because
even the smallest steps can make a huge difference on a financial level.
“Companies that have just three women at their executive level have better results in terms of capital gains returns, cashflow, and EBITDA margin,” says Brunel. She adds that this is, in part, down to the fact that diversity helps develop a different way of approaching problems and looking at investment decisions in a business.
The fact that the scheme centres on a mentoring programme, rather than simply encouraging firms to promote, comes down to the barriers McKinsey found to the progress of women in business.
“Most of the time it’s about confidence the women have, or don’t have, in their own capacity to move on,” explains Brunel. “And in the end they pull themselves back. Women are not so confident in their capacity to take over positions.”
And so the solution the trade organisation has arrived at is to have three women in each organisation involved in the programme selected for guidance from senior staff inside, and outside, the company.
By doing this, women will develop their confidence and learn the skills needed to take on executive positions in the firms they work for.
And it works, says Brunel, citing herself as an example. “I had the chance to work with the chairman of a large French general contractor company, who supported me in a very tough manner but gave me a lot of advice, a lot of good talks,” she says. “He gave me much more confidence and so this is what the programme is about.”
Predictably unpredictable
And there can be no better proof of the success of a mentoring approach in Brunel’s case than her subsequent achievements – specifically at Ivanhoé.
Under Brunel’s management, the investor has become the go-to specialist for the office and residential markets in London and Paris. Essentially an investor in prime assets, the company has invested in a number of quality assets across London in recent years.
But there is a duality to the strategy. Among the most recent acquisitions are 3 Minster Court, EC3 – a short let and in need of refurbishment – and 21 Lombard Court – a core city office let on a long lease.
The two deals could not be more different in approach, and demonstrate some of the uniqueness of the business.
In the case of Minster Court, the company acted opportunistically, says Brunel. “We looked at a couple of core assets but they couldn’t fit the model we were seeking at the time, so we’ve tried to create those values.”
The deal demonstrated an unusual ability in Brunel’s team to think like a private equity firm, while also investing in the longer term through Lombard Court.
If the central strategy of the firm is hard to pin down, Ivanhoé is also predictably unpredictable when it comes to getting the most out of its assets. Some can be held for years, such as 151 Buckingham Palace Road, SW1, which the company owned for more than seven years, or Woolgate Exchange, EC1, which was sold within 18 months at great profit.
Brunel says the company is driven by a need to balance the portfolio. “We need to have a combination of everything in our market,” she stresses. “What makes us special is that we can do this kind of combination.” She adds that by not being a fund manager, Ivanhoé is not obliged to be in the market. “We don’t need to invest. We invest when we think that it makes sense.”
But even if conditions are right, resources can be the restricting factor. “Sometimes you need to acknowledge that you cannot be everywhere and focusing on every investment all over the place,” she says. “Seen from Montreal, even Paris and London are the suburbs.”
Local knowledge
To help find the best deals, Ivanhoé works closely with local investors, in particular with London-based Greycoat. “They know London inside out,” says Brunel. “They have been in this industry, in London, for the past 40 years, and I have been talking with them since 2009.”
Working with Greycoat means that Ivanhoé has no need for a team in London and, despite the increasing number of investments made there, Brunel says that her firm has no intention of having one.
As for looking at the regions in both the UK and Ivanhoé’s adopted French homeland, Brunel says that they offer nothing to the business, due to their size and lack of potential.
As an office and residential specialist, she is also wary of using funds to diversify into sectors such as industrial or retail. “To invest in logistics or retail, you need to have a market share,” she says. “So it is not just about buying some high street retail in any place in the world, a couple of malls here or there. It doesn’t work.”
Where the company has invested in logistics platforms, it has been in collaboration with TPG via the P3 vehicle the partnership acquired in October 2013. This has given it the weight it needs to be a credible player, says Brunel.
It could be argued that the company doesn’t need to diversify into these sectors. However, the ability it has shown to adapt to shifting demand in the office markets of London and Paris has paid dividends so far.
Perhaps this success is the only testimony Brunel needs to prove that having more women at senior levels in companies makes for diverse, interesting and ultimately effective businesses.
Click here to see more on EG’s women’s initiative, REWIRE.
