„Family offices think independently and value the expertise of multipliers and fund boutiques“ (Interview – Markus Hill)

Investments in real estate continue to meet with great interest among institutional investors. Especially in the area of foreign real estate, an overview of special know-how is required. Family offices and law firms have been positioning themselves for some time now as a source of inspiration for professional dialogue at a high level. IPE-D.A.CH editor-in-chief Frank Schnattinger spoke with independent asset management consultant Markus Hill about the „10th Annual US Real Estate Forum 2019“ organised by the law firm Mayer Brown LLP and Urban Land Institute (ULI Germany) in Frankfurt am Main and about the „Second German Real Estate Forum“ event organised by Deutsche Oppenheim Family Office in Cologne.

IPE-D.A.CH: Which topics were addressed in Frankfurt at the „10th Annual US Real Estate Forum 2019“?

Hill: The event took place at the end of January and has a long tradition. The law firm Mayer Brown and the Urban Land Institute (ULI Germany) had organized and invited me. I got to know them last time through Charles Kingston of REFIRE, who was again the moderator this time. The name says it all, the focus was on investments in US real estate. Dr. Joerg M. Lang from Mayer Brown LLP and Stefanie Baden from ULI Germany gave a short introduction to the topic. Paul E. Meyer from Mayer Brown LLP gave a very market-oriented insight into the structure and current developments of the US market in a lecture and the following panel. Accompanying him, Ulrich Steinmetz of DWS Grundbesitz supplemented many of Mr. Meyer’s remarks from the perspective of a „big player“ in the industry. These remarks were rounded off by the view of a „small“ investment boutique of Thomas Gütle of US Treuhand.

IPE-D.A.CH: What did you notice most about the event?

Hill: The presentation of specialist topics in the lectures at such events can usually provide a good map of the area. This was the second time I took part in the series of events in Frankfurt. The interesting part for me is often rather the Q & A after the presentation or after the panel discussion. The view of the multipliers Mayer Brown and ULI was interesting, if only because of their independent status. So that I am not misunderstood here – independent in the sense of „eagle’s eye view of the industry“, not independent of economic interests. As long as all this is transparent, an added value of information is created for the participants of such formats. A law firm lives from satisfied clients, an association lives from satisfied members. The view from „helicopters“, which so to speak hover over the industry, is often enriching. A plus of such formats is also that the composition of the audience, that very competent professionals ask specialist questions. Besides, interesting focal points are sometimes formed in the discussion. General market information, impressions, trends, etc. are a field that offers enlightenment, and the first part of the event has done good preparatory work in this respect. After the panel, a question from the audience led to a small, intensive exchange of ideas on the topic of US real estate, family office thinking, and the importance or only relative weighting of the decision relevance of topics such as currency risk and currency hedging. Here, a „product representative“ from a well-known family office spoke about aspects of product development, risk appetite, and entrepreneurship, based on direct experience from the fast track client service and „skin in the game“ position. As is so often the case, these interesting topics could be discussed after the event in a pleasant atmosphere.

IPE-D.A.CH: What were your impressions at the Family Office event in Cologne?

Hill: The Real Estate Forum of Deutsche Oppenheim Family Offices took place for the second time last November. It was introduced by Dr. Thomas Rüschen of Deutsche Oppenheim Family Office and its advisory board, Jürgen Fitchen. At the first event last year, the topic of US real estate was addressed by the investment boutique German American Realty (GAR), represented by Dr. Patrick Adenauer. This year, the topic was again taken up by the consultant Brad Olsen of Atlantic Partners Ltd., who explained his view as an independent on the structures and particularities of the US market in the area of residential real estate and letting. Deutsche Oppenheim Family Office combined this perspective on US real estate with a market overview for German real estate investors under the motto: „Boom without end or end of the boom? Jochen Möbert of Deutsche Bank Research spoke about the macroeconomic market environment in Germany and a recent in-house study on residential real estate. The event was given a special additional facet in the direction of real estate, family offices and US real estate by the fact that the move of Dr. Christoph Pitschke from Deutsche Oppenheim Family Office AG to the investment boutique GAR of Dr. Patrick Adenauer at the turn of the year 2019 was announced with regret, but also with heartfelt congratulations. The theme quiver from Cologne was rounded off with presentations on the German real estate market by Dr. Christoph Pitschke, Thomas Krahl (Deutsche Oppenheim Family Office AG), and Thomas Meyer from the investment boutique Wertgrund Immobilien AG. An impression that I picked up after the events in Cologne and Frankfurt: Family offices think independently and value the expertise of multipliers and fund boutiques!

IPE-D.A.CH: Is there a common feature of these event formats?

Hill: The two events are representative of a certain category of formats or product offers. To be fair, one has to say that of course, other institutions are also on the way in terms of „Adlerblick“ and „added value information“. DVFA, BVI, BAI, Frankfurt School, IMC – clubs, associations, universities, think tanks, event organisers, etc. They all have their touch in terms of topics, networks, formats. Also in the family office sector, many companies are active in the field of domestic and foreign real estate – HQ Trust, Feri, Tresono FO, Kontora FO, and many others. ULI Germany is perhaps a special case because there is a very interesting connection to real estate topics that are not purely commercial and here a very interesting international component is added. If I were to biasedly break down the two formats mentioned above to one or two points, I would say the selection of participants and the size of the event. Since both organizations are not classic event organizers, there is on the one hand a real interest in discussing the content of the topics, the raising of sponsorship money is not the focus of interest. On the other hand, there are hardly any representatives from the sales sector in these formats. People like to come to such events because they are not „product shows“. Both organisers have to engage in intensive reputation management. To the advantage of the guests!

IPE-D.A.CH: Do you have a bridge in terms of content to the topic of real estate at home and abroad? Why do you follow such topics with interest?

Hill: On the one hand, the issues addressed are closely related to the areas of investment and due diligence, trust, networks. On the other hand, in 2015 and 2016 I had some contact with the topic „Acceptance of US real estate investments among institutional investors in the D.A.CH region“ (MH-Survey) due to two projects. In the course of these projects, I had contacted 140 investors to find out whether there was any interest in offering US investment boutiques at that time. In many telephone calls with decision-makers from the investment sector who were responsible for the due diligence for such products and services, I had an impression that was confirmed once again: The search for excellent properties and local managers was often present. The key point was often that ready-made solutions do not necessarily meet with interest. Interest was consistently met with when it came to special off-market solutions or when people with special know-how could be pointed out. A market that often misses the market of the „big players“. If instead of contacting the family office or the foundation, one approached the „Treasury“ person responsible for the bank or the head of capital investments at insurance companies, one always met with interest and time for a professional exchange of ideas when it was purely a matter of the investment category „foreign investments“. I emphasize this, as this is not just about US real estate, but about know-how networks and personal contact with the advisor abroad. In 2014, I once had the opportunity to accompany law firm Heuking Kühn Lüer Wojtek in the conception, invitation, and moderation of the event „Frankfurter Dialog für Family Offices und Vermögensverwalter“. Here, too, topics such as real estate investments, club deals, and KAGB were dealt with. As a panelist at an event on RAIF structures organised by BAI and the Irish Fund Association, I also had to deal with similar topics. I have come to the following conclusion from the above-mentioned topics – if you find topics that meet with interest and do not attack people head-on with any product offers, then many of those responsible for the field are grateful for making contact or for invitations to interesting specialist events.

IPE-D.A.CH: What topics are you currently working on?

Hill: In the current IPE D.A.CH Asset Management Guide, I dealt with the topic of off-market offers in the family office area versus digitalisation, why, so to speak, many interesting things are still „going moldy“ on some platforms. In the area of seed money searches, one often finds strong points of contact with the topics of club deals, trust, and networks. Currently, for example, I also find the area of private debt very interesting. I am also following the topic of ESG and impact investing more closely, and many things are currently repositioning themselves in this area. In March and May, I will again be attending two events on the subject of fund boutiques and manager selection in the area of liquid investments. I am already looking forward to welcoming Prof. Dr. Carlos Jarillo to Frankfurt again. I am also looking forward to the selection of topics at the upcoming FundForum International in Copenhagen.

IPE-D.A.CH: Many thanks for the interview.


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