Ric Lewis: How to create an ‘all-weather portfolio’
‘Our focus now is on trying to create an ‘all-weather’ portfolio with lower asset-level risk, less exposure to late-stage markets and conservative financing to help underpin our asset and portfolio strategy,’ said Ric Lewis, Funding Partner and Chairman of Tristan Capital Partners, the Pan-European real estate investment manager.
‘There are cyclical challenges in Europe right now but there are also a number of bets we like,’ he said at an event to celebrate 10 years of Tristan. ‘There are still undermanaged assets and the gap between the cost of these ‘impaired’ assets and the value of ‘repaired’, income-delivering, core assets remains attractive. New supply and loose credit, which have been the death knell for previous cycles, are still being managed and controlled with proper late cycle discipline but we’re always watching for signs of excess’.
Tristan has lifted its assets under management by around €1 bln per annum on average in the decade since the firm’s inception. In the last four years the pace of expansion has accelerated, with AUM jumping by 50%, to hit a total of €10.7 billion (as at 31 March 2019). Since the firm was founded in 2009, Tristan has completed €17.8 billion in transactions (including acquisitions and disposals).
Tristan has raised over €8bn of capital across its EPISO (opportunistic/value added fund series) and CCP (core-plus fund series) to date, claiming the top spot in terms of capital raised by a European-headquartered private equity real estate firm.
The company has also grown its client base by almost 50% over the past four years, with 21% of clients across all funds now coming from Asia and the Middle East, 43% from Europe and 36% from the US and has a repeat investment rate across funds of around 70%.
Tristan Capital Partners was launched on 2 June 2009, following a client-led lift out of predecessor firm Curzon Global Partners. With 10 funds and a 20-year track record in Europe, the Tristan team has completed 197 investments across 19 countries, including €6.7 bln of office deals and €2.4 bln of logistics deals (total gross cost). In terms of geographies, Germany and the UK top the list, with €4.0 bln and €3.2 bln of transactions respectively.
Looking ahead at the forces which will shape our world in the coming years, Lewis said that ‘technology will inevitably continue to disrupt and drive the evolution of alternative asset classes. We also believe that the European open-ended/perpetual fund universe will bloom, as clients look for more efficient ways to recycle capital. As a first mover in the European ‘ODCE fund’ space, our aim is to be at the vanguard of that change.’
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