Finding a place: Fundraising amid the pandemic has posed challenges and opportunities
The role of placement agent is one of relationships and matchmaking — an extensive Rolodex (or LinkedIn profile) is key, as is an understanding of what investors and managers are looking for and how to meet those needs. Amid the COVID-19 pandemic, with its lockdowns and travel restrictions, the role of an experienced placement agent became even more important, especially for those navigating the fundraising waters for the first time.
Institutional Real Estate Americas senior editor Loretta Clodfelter recently asked a group of placement agents to answer a few questions about their experiences in the past year, and to share their forecasts and expectations for U.S. real estate fundraising. The roundtable participants were Matt Hershey, partner, Hodes Weill & Associates; Nancy Lashine, founder and managing partner, Park Madison Partners; Walter A. Stackler, managing partner, Shelter Rock Capital Group; and Bill Thompson, senior managing director and co-head, Real Estate Capital Advisory, Evercore.
What was your experience during the past year amid the COVID-19 pandemic?
Stackler: When the pandemic and lockdown first hit, many investors held off or postponed commitments to focus on their existing portfolios. By the summer, the focus shifted to deploying capital again and, in general, existing managers and established brands were the biggest beneficiaries. Managers seeking new investor relationships faced some considerable headwinds unless they were doing something very unique. Starting in the late fall of 2020 and accelerating in the first quarter of 2021, we saw an uptick in investor interest in new manager relationships, especially if the manager had a real and tangible pipeline, seed assets, or is particularly exceptional in their specific niche.
Lashine: Park Madison has continued to grow as a firm despite the pandemic. We established a new capital advisory practice focused on recapitalizations and restructurings, and in February 2021 we announced our first successful transaction: a $360 million industrial portfolio recapitalization with our client NorthBridge Partners. We also continued to hire and add new team members, increasing our headcount from 11 to 15 professionals.
Thompson: Strangely, something I would not have anticipated, it was a record year for us. That reflects our business changing and getting involved in a range of capital-raising activities, not just traditional fundraising, like the GP-led recap space. It also reflects GPs feeling the greater risk associated with reaching their capital objectives, hence more interest in leveraging their own internal efforts via external advisers.
Hershey: While COVID-19 was very challenging, thankfully Hodes Weill had its best year ever in 2020. Our team, including several new hires we still haven’t met in person, worked around the clock from remote corners of the country and world. With our team, clients and investors, communication and flexibility were key. In uncertain times, clear and meaningful messages are valuable and reassuring. Also, numerous situations necessitated developing new approaches to remain a best-in-class organization. A more explicit integration of DEI initiatives into our day-to-day operations is an obvious example of that.
Stackler: The fundraising experience definitely changed throughout the pandemic, given we had to quickly pivot to virtual meetings to ensure fundraising progress. We found that many institutional investors were incredibly nimble and adjusted their diligence processes to accommodate virtual sessions, such as “asset tours” and operational due diligence. Overall, “visiting” multiple geographies and time zones within one day can make connecting with investors and consultants across the globe more efficient. This was especially helpful as we organized investor meetings with our colleagues in Japan and Singapore.
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