Macquarie Capital Partners

MCP, which was spin off from US investor Security Capital in 1999, helps companies raise money for European property expansion, drawing on a network of capital sources

Macquarie Capital Partners’ (MCP) capital raising for Shurgard Self Storage’s expansion in Europe is typical of the type of transaction that the property investment banking specialist is keen to work on. The deal will see Shurgard gain €148m in financial backing from Crescent Euro Self Storage Investments SARL for the development of 25 new sites in Europe.

Donald Suter, managing principal for MCP points to the global nature of the deal: it involves a US company, European expansion and Middle Eastern capital. Suter says MCP’s focus on raising private equity for public and private property-operating companies is about “building bridges between sources and users of capital”. He adds that the firm’s relationships in the US, Europe and Middle East (and, via its partner Macquarie Bank, in Asia and the Pacific Rim) give it global access to capital. For example, with US-based Prologis, it has set up Macquarie Prologis Trust, an Australian-listed property trust with North American assets.

MCP has completed 97 deals since its creation in 1991, with a total value at the time of $18.3bn. Of these, 52 were private equity deals, raising $10.7bn in third-party equity; while 17 were public equity offerings totalling $2.2bn. The company carried out 16 private debt placements, totalling $14.4bn, and also worked on 11 merger and acquisition deals.

Rather than the usual approach of calling on potential corporate clients to discuss their needs for capital, Suter says MCP focuses on building relationships with its capital sources, allowing it to take specific ideas to potential clients.

In Europe, MCP has focused on raising equity for companies, such as the £59m it raised for US company Sunrise Assisted Living’s UK expansion. Its global links enable it to help companies to expand by soaking up institutional capital. “The challenge institutions have is that many want exposure to multiple European markets but in reality there are very few pan-European operating companies,” says Gerard de Gunzberg, principal at MCP.

“We are looking to build relationships with both large and smaller operating companies in the UK and Europe – companies with strong management teams and focused strategies,” adds de Gunzberg. Suter adds: “We have just begun to execute our long-term strategy of becoming the preferred capital source for property-operating companies, and we continue to expand our access to global capital sources. We are working with a European company on an opportunity to raise capital in Australia.”

MCP started as an internal capital markets group for US investor Security Capital, which at its peak invested in 23 businesses. MCP undertook capital raising and merger and acquisitions work for Security Capital and its co-investment entities, advising on the flotation of ProLogis in February 1994 and raising a record $1.1bn equity for its European Properties Fund in 1999.

Security Capital spun off MCP in 1999, but the parent company was keen to keep a minority stake. The management chose Australian bank Macquarie as a strategic partner to support a management buyout. Suter says the bank’s boutique>

Selected Macquarie Capital Partners transactions
MCP’s links to capital sources in other parts of the world have helped companies such as Sunrise Assisted Living expand in Europe
Date	Company	Sector	Value $m	Equity raised by MCP $m*	Debt raised by MCP $m	Advisory/M&A fees $m
June 03	Sunrise Assisted Living, US	Assisted living	318.9	84	0	0
June 03	Regency Centers, US	Retail	55.5	17.4	0	0
May 03	The Lock Up Storage Centers, US	Self storage	70	0	700	–
May 03	Shurgard Self-Storage, Europe	Self storage	175.2	74.2	00	–
May 03	Sunrise Assisted Living, UK	Assisted living	97.1	32.9	0	0
May 03	Developers Diversified Realty, US	Retail	169.9	59.9	110	0
May 03	Private company, US	Manufactured housing	200	n/a	n/a	200
March 03	AB CPFM Europoperty Fund, Europe**	Industrial/office	272.9	109.2	0	0
March 03	Aspen Retirement Corporation, US	Assisted living	95	19.6	00	–
February 03	Northacre, UK	Residential	62.3	14.5	47.8	0
February 03	Keystone Property Trust, US	Industrial	208	125	0	0
Source: Macquarie Capital Partners * Includes co-investment **Represents expected value after full capital commitment. Currently €50m of equity capital raised