Orchard Street Investment Management – The specialist commercial property investment manager has appointed Edward Bales as retail asset manager. In his new role, Bales will form part of the team responsible for managing Orchard Street’s £1.1bn retail portfolio, mainly comprising of retail parks and warehouses, helping to implement business plans, manage tenants and drive income performance. He joins the business from Cube Real Estate, where he worked as an investment and asset manager responsible for managing £100m of assets across a number of retail subsectors.

BMO Real Estate Partners – Joanna Tano has been appointed head of research. Tano will be based in London. She will work across BMO REP’s European footprint with the teams in the UK, Germany and France to enhance existing and develop new products, as well as the overall positioning of the company with clients. She joins BMO REP from Cromwell Property, where she was the head of research. Prior to this, Tano was at Cushman & Wakefield for 17 years and held several positions, including partner, head of operations, EMEA Research. Tano’s appointment follows the departure of Sue Bjorkegren who is retiring after 22 years at the company.

Europa Capital – The pan-European real estate investment manager has promoted James Farmer to partner, in addition to three further promotions across origination and acquisitions and investor relations. Farmer joined the business as an associate in 2010 from the Royal Bank of Scotland and during that time has assumed responsibility for acquisitions in Germany, Austria and Central Europe. He has also been instrumental in assisting fund manager, Andy Watson, on the growth of the Europa Diversified Income Fund. Will Hughes and Hugo Adams have both been promoted to director. Hughes has been with Europa Capital for six years focusing on origination and acquisitions across Europe, whilst Adams joined the business approximately four years ago and works on acquisitions in the UK, Ireland and the Nordics. Yuko Burrows has also been promoted to associate director having joined the business’s investor relations and client servicing team in 2013.

Deutsche Finance International – Michael Attfield has been appointed head of tax. In this newly created role within the finance team, Attfield will lead the firm’s tax function across the firm, its funds and its investments, from structuring and due diligence through to reporting and compliance. He joins the company following more than three years at Ares Management. As real estate tax vice president, he oversaw tax structuring and due diligence for numerous real estate transactions in Europe, structuring of new funds and related discussions with investors, as well as ongoing tax compliance. He recently worked on the tax structuring, including initial investor discussions, of a European real estate value-add fundraise, as well as managing the tax structuring and due diligence for the acquisition of several UK student housing portfolios. Prior to this, he spent three years at Deloitte as associate director within the real estate M&A Tax department. Attfield began his career at KPMG in various tax roles. Deutsche Finance International has also hired Oliver Tipping as a finance analyst who will start in May.

M&G Investments – Duncan Batty and Dan Riches have been appointed real estate debt co-heads to take over from John Barakat. Barakat, who founded M&G’s real estate finance strategy in 2009, will be leaving the company. Batty has 15 years of real estate experience. He joined M&G in 2011 and has been involved in the establishment and management of funds and segregated accounts. Prior to joining M&G, he was a solicitor practising in the real estate finance industry. Riches has over 20 years of real estate and finance experience, having joined M&G in 2010 to focus on the origination and execution of investments. He was previously in the European CMBS group at S&P and prior to that worked at RBS where he originated and structured real estate finance transactions.

Trinity Real Estate Investments – Marc Rucinski and Casey Wilson have joined the firm as managing director and vice president, respectively, of product development and investor relations. Rucinski and Wilson join Trinity from Citi Private Bank where they worked as members of Citi’s global investment management team over the past decade to source and structure private investment opportunities on behalf of ultra-high-net-worth and family office investors around the world. Rucinski and Wilson most recently served as Asia Pacific head of private equity and real estate and senior vice president, respectively. At Trinity, they will use their knowledge, experience and vast network of relationships to broaden the firm’s product offerings and launch new investment strategies over time.

Leumi UK – The London-based subsidiary of Israel’s international bank has appointed Peter Clayton as the bank’s new head of property finance to expand Leumi UK’s real estate lending activities. Reporting directly to Chief Business Officer Andy Mallin, Clayton brings over fifteen years of experience within property finance to Leumi UK and joins from Lloyds Bank where he held the role of relationship director within the real estate and housing team.

Caerus Debt Investments – Thomas Ertl has been appointed as co-CIO and member of the Caerus Investment Committee. Before joining Caerus, he was managing director and CIO of the London-based RiverRock European Real Estate Fund. His prior positions include ten years in various roles at Münchner Hypothekenbank eG where, among other things, he facilitated the commercial real estate direct financing business. Ertl was subsequently director real estate finance Germany at Lehman Brothers and then, as Executive Director, he led the real estate finance Germany team at Morgan Stanley Bank.

Intermediate Capital – Alexandra Lazarski and Rachael Pittaway have joined the company’s real estate team as associate directors reporting to Chris Nichols under the sale and leaseback strategy, while Jaynika Amin has joined the residential development team as an associate reporting to Jai Patel head of residential development. Lazarski has eight years’ experience working in European real estate markets and was previously a director of European acquisitions at Thor Equities. Prior to this, Lazarski was a financial analyst for CBRE Capital Advisors. Pittaway joins ICG Real Estate from Castleforge Partners in London, where she was a director of real estate investment management for the firm’s European real estate private equity fund and was responsible for the origination and evaluation of investment and asset management opportunities across the UK and Europe. Prior to this, she was a senior analyst in the real estate capital markets division at CBRE. Amin was previously on the investment banking graduate programme at BNP Paribas in London, where she spent significant time on real estate financing.

Union Investment Real Estate – Georg Niemeyer has been appointed head of data management, reporting and systems. He replaces Lars Scheidecker, who joined the senior management team of Union Investment Real Estate Digital, a Union Investment technology spin-off, on 1 September 2020. Niemeyer is joining Union Investment from the Otto Group, where he spent nine years in a range of roles, most recently as head of data management and technology. Prior to his time at the Otto Group, Niemeyer worked for various companies in IT and process consulting with a focus on business intelligence as well as finance and performance management.

Generali Global Infrastructure – The infrastructure asset manager has appointed Jonathan Aiach as investor relations director. Aiach’s arrival is part of the company’s accelerated growth, and in particular the expansion of its investment solutions and its European institutional investor base. Aiach started his career in 2008 at Cheyne Capital hedge fund in London as a hedge fund analyst, then joined BNP Paribas in 2009 in derivatives structuring. From 2013 to 2018, he contributed to the development of Blackrock’s alternative investment strategies in London and Geneva, with a particular focus on hedge funds and real assets. He previously worked for the private equity fund Oakley Capital in origination and business development roles. In 2018, Aiach became senior VP at DWS in London, responsible for the development of the infrastructure equity and debt platform.

Mitheridge Capital – The alternative investment firm has appointment Symon Elliott to its advisory group with non-executive responsibility for leadership and development. Elliott is founder of Leaders Futures, a mentoring enterprise that connects leaders to senior executives. Prior to this, Elliott was at Russell Reynolds for 18 years, where he led operations in the US, Europe and South Asia as well as overseeing the CEO and the board services practice.

Royds Withy King – Angela Gregson has joined the law firm’s London office as a partner in the property disputes team. She is a solicitor-advocate with extensive experience in all aspects of commercial and residential property litigation work.

Lead contractor GMI Construction is primed to start work on the £37m residential scheme, one of three developments Mulbury City is advancing in Manchester’s burgeoning New Cross district.

The developer won planning consent for the 12-storey project on Bendix Street last December, and a formal decision notice has now been handed down by the city council, paving the way for a start on site.

Earlier this year, investor Cheyne Capital Real Estate agreed to forward fund another of Mulbury’s New Cross schemes, a £32m 144-apartment development on Oldham Road.

The developer’s third New Cross venture is the 73-apartment Peeler’s Yard on Goulden Street.

All three of the projects were designed by Tim Groom Architects.

GMI is to build the Oldham Road and Bendix Street schemes and both projects are expected to complete by summer 2023, according to a construction management statement prepared by the contractor.

Meanwhile, On Goulden Street, Mulbury Homes, part of the wider Mulbury group, will build the eight-storey apartment block incorporating the listed former fire station at the site.

Elsewhere in New Cross, one of the seven neighbourhoods that make up the £4bn Victoria North masterplan, construction of Far East Consortium’s 80-home scheme on Addington Street started in March.

FEC’s in-house contracting arm DEX Construction is building the nine-storey block.

Dietmar Schmitt, a prolific international trader, says his new fund is ready to capitalise on Brexit and is calling for family investors.

Schmitt is the founding chief executive and chief investment officer of SAM Capital Partners, an independent alternative investments firm, based in London.

Originally from Wiesbaden in Germany, Schmitt started his career in the 1980s at Dresdner Bank where he worked in Frankfurt and New York. In 1990, he joined Morgan Stanley and held various roles as a senior European equity trader in London and Frankfurt. He was an acting junior board member at Morgan Stanley Bank in the late 1990s.

In 2001, he joined Cheyne Capital hedge fund as a senior portfolio manager. He left Cheyne fund in 2007 to pursue his ambition of setting up his own fund and launched SAM Capital Partners.

Schmitt will present his new SAM Capital UK Long Short Equity Fund to fellow members at the Campden Club Co-Investment Workshop on 30 April. He spoke with CampdenFB about his career to date, his background in family business, his investment strategy and what the fund has to offer.

Tell us your philosophy when it comes to investing and what have you learned in your journey in finance?

I’ve learnt a lot about what not to do. No one in the market is 100% accurate over time, but I know how to be careful and when to pull back. We maintain a strong focus on capital preservation. We don’t try to shoot the lights out, rather we protect capital and produce meaningful risk adjusted returns. The biggest mistake one can make, is risking too much and digging a deeper and deeper hole. If you lose 50% you have to make double that to regain the loss.

I understand stocks, how they trade and how they move. I understand the economics of stocks and the underlying companies. I do not take risks I cannot calculate.

Some 30-40% of the trades I do during the day won’t make money, that’s just part the business. Our profitable trades make more than the losses, resulting in positive returns on the day. In order to generate true alpha you have to be dynamic and come up with new trade ideas every day. This is what we do at SAM Capital Partners.

Growing up, were there expectations you would join your family business?

My parents were in the distilling business, it was the second largest brandy distilling business by volume in Germany until they sold it in the 1980s. Since then, we’ve been in German real estate, I manage the liquid assets.

My grandmothers had their own businesses, so there were opportunities to join family businesses, from the age of 16 I was more into stocks and trading than school, I was good with numbers.

I told my parents, and did an apprenticeship in a bank to acquire a banking licence. The plan was to study economics or law. The bank asked me to stay, and I said only if you make me a trader on the exchange in Frankfurt and New York. Sooner than I knew it, I worked in Frankfurt and was later transferred to New York.

My parents were shocked that I didn’t go to university, but I never regretted it and my parents are now very happy.

What was your career path until you launched SAM Capital Partners?

I left Morgan Stanley in 2001 to join a former colleague when he was setting up Cheyne Capital. I was running an internal fund there, with two investors only, his family and mine. In 2007, I spun off with my own company, SAM Capital Partners, where we for the first time opened for external investors. We have done really well—in 2008-09, during the financial crisis, we returned more than a 25% net to investors. We were growing and everything was going well.

I understand personal reasons prompted you to step away temporarily.

My wife got sick with cancer in 2011. I packed up to focus on the family. I kept my Financial Conduct Authority license and, three years ago, we reactivated the dormant company. We have a MENA (Middle East and North Africa) fund, we have done several deals amounting to €150 million+ ($180 million+) real estate transactions, and we also have a successful mergers and acquisitions advisory business. Now we are excited to launch our UK equity long-short fund with the same investment approach and strategy we had previously, as I’ve had continuously improved upon all my life.

Why did you choose the United Kingdom for your SAM Capital UK Long Short Equity Fund?

The reason is very simple—because of Brexit. With Europe moving together in the late 1990s, investor focus became more on sectors as opposed a country-approach.

With the UK now outside of the European Union, a new asset class is forming. Family offices and international institutional investors have significant UK exposure and the investment universe is plentiful across most sectors. Given the new political independence and structural independence from regulators, the UK should be considered a new independent asset class and we want to cater for it.

What is your fund offering?

We offer a short-term trading fund for investors who want to participate in intra-day market movements.

I’m not like Warren Buffett or traditional long-short fund managers, who buy and hold and charge the investor a storage fee. An analogy I like to use is that of a fruit trader—I buy and sell fruit all day long—apples, bananas, peaches, anything I can trade—and I make small amounts out of each trade. The more turnover I generate, the more money I can take home.

Normally, people with my skills and experience, don’t accommodate institutional investors: ‘A’, because they don’t want to talk to investors, and ‘B’, they’re not willing to operate in an institutional framework. We offer that infrastructure and for us it’s a privilege to connect with our investors too.

In addition to Brexit, currency and country risks are reasons for setting up the fund. Many investors think and invest in pounds, and we give them the option to manage currency exposure themselves. The UK is a big market, hyper liquid and fully transparent.

What is the timeline for your new fund?

The fund is set-up, the structure is there. We have calls with the chief investment officers of some large investors around the world. Once we have those investors on board and they allow us to publicise their names, it will give huge credibility to our business. We are open to have a conversation about favourable fees for early day investors.

What are the biggest risks you consider?

Country and currency risk, which we eliminate with investing only in one country. That leaves us with one main risk—single stock events. These are mitigated by our conservative position sizing and optimising a balanced portfolio. If you chase high returns, that’s the risk you run. We aim for low double digits returns. If we can make five base points a day, we’re happy.

Which stocks do you avoid?

Biotech is a hot topic at the moment, but it’s a long-term investment and not ideal for short-term trading due to high volatility and lack of transparency. We invest in hyper liquid and fully transparent stocks. We have a short-term holding period, from intra-day up to three weeks and we actively trade around every position.

How often do you do that?

Intra-daily, if I can turn over 100% of assets under management (AUM) and I make five basis points on every trade that generates 10% annualised return.

We run a balanced book and we are pure alpha generators. We are agnostic to the market goes up or down. What matters is that the longs don’t lose as much as the shorts, or the other way around when markets go up.

Twenty years ago, I was analysing every single investment case manually. Now we have an algorithm that identifies all possible trades and once we have identified opportunities, we look at the stock itself. Is there any news in the stock or in the sector? Are there any liquidity events, other news that effects the stock price? Once we have done that, we look at it as a fit for the portfolio.

Usually there are around 30-35 positions in the portfolio, longs or shorts. Positions are typically equally weighted between 3-5%, depending on the trading activity. That means we have about 100-150% of AUM in the market, we use very limited leverage. We are conservative and disciplined; we protect the money to the downside.

In 2008, we lost about 4.5% where the peer group was down 40% on average. In 2009, January and February, was a disaster for the markets, we made money. In March 2009, when the market fell sharply and then rallied hard, we made money. From November 2008, we had 16 consecutive profitable months. Why? Because we were disciplined. If the market is up 10%, you’re not going to make 10% with us, you make 2-3%. However, when the market is down 10%, we still perform. That’s how we generated outperformance of about 38% over the peer group and outperformed the market by 50%.

It’s not how much money you make in the good times, it’s how little you lose when things go wrong. It’s downside protection. Being conservative has proven to be a very good concept. When I was at Morgan Stanley in the 1990s, I generated about 30% of the profits with 1-2% of the capital that was used, trading around positions and that’s where my skillset lies.

How would you describe your team at SAM Capital Partners?

We have a very seasoned and institutionalised team with diverse backgrounds, and a track record of working together. On the advisory board we have Peter Willner, the chief investment officer of the Siemens pension plan.

Our third-party providers are of the highest calibre—Simmons and Simmons as lawyers, Northern Trust as the bank and Ernst & Young as the auditors.

What’s been your experience of engaging with family investors at SAM Capital Partners?

We worked with some great family office investors before my wife got sick, from the UK, Switzerland and Italy.

Our mandate is to make money over time for our investors and I enjoy engaging with family offices, to understand what they do and want to achieve, and hopefully help them in achieving their goals.

The Church Pension Fund (CPF), the sponsor and administrator of pension and other benefit plans for The Episcopal Church, announced that it invested $20 million in Turner Multifamily Impact Fund II (Fund), a $357 million workforce housing fund managed by Turner Impact Capital (Turner), one of the nation’s largest real estate investment firms dedicated to social impact investing. The Fund, together with the first Turner Multifamily Impact Fund, will enable Turner to acquire and manage up to 20,000 housing units across the country and keep them at rent levels that are affordable to residents earning less than the area median income.

Roger Sayler, Executive Vice President and Chief Investment Officer of CPF, said, “Turner Impact Capital has a long-tenured team with deep expertise investing in the affordable workforce housing market. We look forward to building our relationship with Turner Impact Capital as we continue to explore future positive impact investments that offer attractive risk-adjusted returns while also addressing key societal issues.”

Turner’s social impact mission extends beyond preserving this housing stock. Turner also offers residents a wide range of free enrichment services tailored to each community, such as afterschool homework help, employment assistance, community health services, and neighborhood watch programs.

Bobby Turner, Chief Executive Officer of Turner Impact Capital, said, “We are grateful to The Church Pension Fund for their support, and we are looking forward to working together in the future. While many investors have struggled to raise capital for social impact funds, we have seen remarkable interest due to our singular focus on impact strategies, the demonstrated success of our previous housing investments, and our proven track record generating superior risk-adjusted returns across complementary investment platforms that also include education and community-serving healthcare facilities.”

CPF’s socially responsible investments around the world focus on economically targeted initiatives (urban redevelopment, affordable housing, sustainable agriculture, and microfinance) and environmentally responsible programs (sustainable forestry, clean technology, and green buildings).

This transaction follows CPF’s prior socially responsible investments, which include investments with New Energy Capital Partners, Avanath Capital Management, Bridges Fund Management, Cheyne Capital Management, Developing World Markets, Social Investment Managers & Advisors, and SilverStreet Capital.

CPF also seeks to convene people and connect investors with socially responsible investing (SRI) fund managers and opportunities through its Insights & Ideas series of conversations. Earlier this year, it hosted a discussion on investing in economically disadvantaged communities, which follows other conversations focused on faithful investing, shareholder engagement, positive impact investing, and sustainable investing.

10. JPM AM assigns new co-manager to €6bn worth of macro funds

JPM Asset Management assigned Virginia Martin Heriz as a portfolio manager across its suite of global macro funds. Heriz, who joined JPM AM from Aberdeen Standard Investments in 2019, was officially assigned to three funds within the company’s Luxembourg-domiciled fund range on 22 March.

Heriz will work alongside the existing managers Shrenick Shah, Josh Berelowitz and Benoit Lanctot on the €5.39bn JPM Global Macro Opportunities, €780m JPM Global Macro and €692m JPM Global Macro Sustainable funds.

9. Vontobel bulks up fixed income desk with series of hires

Vontobel built on the expansion of its fixed income operations by adding four new faces in its New York and Zurich offices. The most prominent of the new recruits is portfolio manager Marc van Heems, who has joined from rival group Lombard Odier Investment Managers. He had overseen several funds at LOIM covering Swiss franc debt, as well as European and emerging market bonds.

8. Mobius co-founder joins GIB as part of EM expansion

Gulf International Bank (GIB)’s asset management arm appointed former Mobius Capital Partners pair Greg Konieczny and Kunal Desai to serve in its newly formed emerging market equity team.

Konieczny, who was one of the three co-founders of Mobius Capital Partners in 2018, will serve as head of global emerging markets equities.

Desai, who also worked at Mobius where he was co-responsible for the creation and implementation of their EM equity investment process, will join as a portfolio manager for global emerging markets equities.

7. Manager steps down from recently soft-closed JPM thematic fund

Berkan Sesen stepped off the $1.9bn (€1.6bn) JPM Thematics Genetic Therapies fund, with Yazann Romahi and Aijaz Hussein remaining on the thematic fund, Citywire Selector learned. In a statement on JPM Asset Management’s website, the company said Sesen stepped down as a fund manager on 2 March.

A spokesperson for JPM AM confirmed to Citywire Selector that Sesen has left the firm to pursue another opportunity. The investment process of the Luxembourg-domiciled fund remains the same.

6. Exclusive: LOIM makes three hires for Asian equity team

Lombard Odier Investment Managers hired three Asian equity experts and one portfolio manager for its sustainable strategies. Henry Zhang joined as a portfolio manager from Harvest Global Investments. He is based in Hong Kong and will take charge of the China High Conviction strategy.

The second hire for the Asian and emerging markets equity is Ashley Chung, who will be acting as a fund analyst and a junior portfolio manager. Faye Gao also joined the team, who, like Zhang, joins from Harvest Global Investments. She is based in Hong Kong and brings a deep knowledge of the financials and property sectors.

5. Converts head exits bond boutique after two decades

Akin Akinloye, head of convertible bonds at Cheyne Capital hedge fund, left the UK-based group after nearly two decades with the company. Akinloye joined the company in 2000 and has worked as a portfolio manager, as well as a partner, for the company. He had been the lead manager on the Cheyne Convertibles Absolute Return fund, which is now overseen by Annelie Fearon.

4. Co-head of AM leaves Goldman Sachs after six months in role

Goldman Sachs’s co-head of asset management, Eric Lane, is leaving the firm after just six months in his current role. According to an internal memo, Lane will be working closely with Julian Salisbury, his fellow co-head, to ensure a smooth transition. The duo assumed their responsibility at the helm of the asset management division in September 2020.

3. Ex-Santander UK CIO joins Nedgroup as investments head

Nedgroup Investments hired Santander Asset Management’s former chief investment officer for the UK, Tom Caddick, to serve as its head of investments in London for the multi-management division. The appointment of Caddick, who stepped down from Santander AM at the start of 2020, is part of Nedgroup’s plans to broaden its reach in the UK market.

2. Veteran manager and deputy CIO to exit H2O AM

Embattled fund house H2O Asset Management announced a refocusing of its investment efforts, which involves funds being closed or refined. As a result of the changes, veteran fund manager Gonzague Legoff and deputy chief investment officer Jean-Jacques Duhot left the boutique.

In a statement outlining the changes, H2O Asset Management said it has assessed its long/short equity coverage and its crossover with existing strategies and other areas of expertise. This has resulted in the closure of the H2O Fidelio fund and will also see the H2O Atlanterra fund close.

1. Former H2O fund manager launches global macro boutique

Former H2O Asset Management fund manager Jeremy Touboul has a new boutique to focus on sustainable opportunities in the global macro discretionary space.

Touboul, who stepped down from H2O AM in late 2019, has joined forces with former State Street France chief executive officer Raphaël Remond to launch the new firm, which is called LIOR Global Partner.

Touboul, who was Citywire AAA-rated for his risk-adjusted performance across several funds at H2O prior to his exit, will serve as chief investment officer of the new venture.

Credit and real estate experts have described the differing degrees to which the pandemic has affected markets and the extent to which the memory of the GFC has affected the recovery.

Speaking in a session on domestic credit lending, CIP Asset Management head of acquisition David Hoskins said that while the overall speed of recovery asset classes has been quick – 12 months as opposed to two years after the global financial crisis – that speed has “really varied” by sector.

“We’ve seen retail bounce back quickly with the trend to online. Then we’ve seen other sectors we thought would be resilient have been more impacted like childcare because of the increase of people working from home. Then other sectors we thought were in decline, it actually accelerated that decline, if we think of cinemas and the growth of streaming services,” Hoskins explained.

With that overarching view, Hoskins added that existing investors have also heavily retreated to domestic markets. “That’s exactly what we saw in the GFC,” he said.

According to Benefit Street Partners senior portfolio manager and head of real estate Michael Comparato, the credit market is “slowly coming back” in 2021. Like Hoskins, however, he emphasized the uneven nature of the recovery.

“People began lending again in multi-family in the middle market probably in the early to mid-fourth quarter of 2020, and we’re slowly started to see people dip their toes into hospitality lending, office lending,” Comparato explained during a session focussed on pandemic dislocations. “There is still a lot of uncertainty out there, we’re seeing them tread lightly but they’re slowly coming back.”

Different fortunes

Comparato said most asset classes actually performed “fairly well” during the pandemic period, other than the hospitality and to a lesser degree multi-family real estate and associated credit.

“Multi-tethered and multi-family that’s a little more tied to the overall economy have struggled a little in terms of rent collections and then obviously closed malls have been on a slow steady train wreck of a decline for quite some time,” he described.

Even within sectors, subsectors experienced vastly different fortunes during 2020, he continued.

“The large loan credit market was not affected materially at all, however the middle market was absolutely decimated, Comparato explained. “The middle market is really a collection of smaller, under-capitalised debt funds and smaller community banks and when things like pandemics or GFCs hit they do not have the wherewithal, the balance sheet or the relationships to get through those times.”

One sector that has made a significant and likely permanent change is shift out of traditional major cities, Comparato observed. High-tech cities like New York and California will continue to lose people and business while high costs pervades, he said.

“Look at Texas, Florida, they have 1,000 people a day moving into those states,” he said. “I do not see anything reversing this trend in the foreseeable future… As the population moves the businesses move. Capital goes where it is welcome and it stays as long as its welcome.

No blanket assumptions

Such is the variance across sectors performance during the pandemic, Cheyne Capital hedge fund head of real estate credit Ravi Stickey warned the audience against homogenous assumptions, especially in real estate.

“I think the tendency to blanket the performance of all real estate asset classes for covid is probably not correct,” he said.

Anything linked to retail real estate has certainly suffered, Stickey agreed, and the office sector has clearly pulled back. But pinning this purely on the pandemic would be akin to false attribution, he believes.

“A lot of the changes in valuations and usage we’ve seen have been driven not so much by the pandemic itself but rather from investors appreciation of the structural changes and how we may price real estate going forward not just in the coming years, but in the coming decades as well,” Stickey explained.

Debt may be “a different story”, however. After being tarnished with the same brush after 2008, real estate debt has “retrenched” in terms of risk profile and the leverage held REITS, he explained.

“Coming into this part crisis I don’t see real estate debt being overstretched; perhaps because of the prior crisis that caused that retrenchment in the first place.”

Orchard Street Investment Management – The specialist commercial property investment manager has appointed Edward Bales as retail asset manager. In his new role, Bales will form part of the team responsible for managing Orchard Street’s £1.1bn retail portfolio, mainly comprising of retail parks and warehouses, helping to implement business plans, manage tenants and drive income performance. He joins the business from Cube Real Estate, where he worked as an investment and asset manager responsible for managing £100m of assets across a number of retail subsectors.

BMO Real Estate Partners – Joanna Tano has been appointed head of research. Tano will be based in London. She will work across BMO REP’s European footprint with the teams in the UK, Germany and France to enhance existing and develop new products, as well as the overall positioning of the company with clients. She joins BMO REP from Cromwell Property, where she was the head of research. Prior to this, Tano was at Cushman & Wakefield for 17 years and held several positions, including partner, head of operations, EMEA Research. Tano’s appointment follows the departure of Sue Bjorkegren who is retiring after 22 years at the company.

Europa Capital – The pan-European real estate investment manager has promoted James Farmer to partner, in addition to three further promotions across origination and acquisitions and investor relations. Farmer joined the business as an associate in 2010 from the Royal Bank of Scotland and during that time has assumed responsibility for acquisitions in Germany, Austria and Central Europe. He has also been instrumental in assisting fund manager, Andy Watson, on the growth of the Europa Diversified Income Fund. Will Hughes and Hugo Adams have both been promoted to director. Hughes has been with Europa Capital for six years focusing on origination and acquisitions across Europe, whilst Adams joined the business approximately four years ago and works on acquisitions in the UK, Ireland and the Nordics. Yuko Burrows has also been promoted to associate director having joined the business’s investor relations and client servicing team in 2013.

Deutsche Finance International – Michael Attfield has been appointed head of tax. In this newly created role within the finance team, Attfield will lead the firm’s tax function across the firm, its funds and its investments, from structuring and due diligence through to reporting and compliance. He joins the company following more than three years at Ares Management. As real estate tax vice president, he oversaw tax structuring and due diligence for numerous real estate transactions in Europe, structuring of new funds and related discussions with investors, as well as ongoing tax compliance. He recently worked on the tax structuring, including initial investor discussions, of a European real estate value-add fundraise, as well as managing the tax structuring and due diligence for the acquisition of several UK student housing portfolios. Prior to this, he spent three years at Deloitte as associate director within the real estate M&A Tax department. Attfield began his career at KPMG in various tax roles. Deutsche Finance International has also hired Oliver Tipping as a finance analyst who will start in May.

M&G Investments – Duncan Batty and Dan Riches have been appointed real estate debt co-heads to take over from John Barakat. Barakat, who founded M&G’s real estate finance strategy in 2009, will be leaving the company. Batty has 15 years of real estate experience. He joined M&G in 2011 and has been involved in the establishment and management of funds and segregated accounts. Prior to joining M&G, he was a solicitor practising in the real estate finance industry. Riches has over 20 years of real estate and finance experience, having joined M&G in 2010 to focus on the origination and execution of investments. He was previously in the European CMBS group at S&P and prior to that worked at RBS where he originated and structured real estate finance transactions.

Trinity Real Estate Investments – Marc Rucinski and Casey Wilson have joined the firm as managing director and vice president, respectively, of product development and investor relations. Rucinski and Wilson join Trinity from Citi Private Bank where they worked as members of Citi’s global investment management team over the past decade to source and structure private investment opportunities on behalf of ultra-high-net-worth and family office investors around the world. Rucinski and Wilson most recently served as Asia Pacific head of private equity and real estate and senior vice president, respectively. At Trinity, they will use their knowledge, experience and vast network of relationships to broaden the firm’s product offerings and launch new investment strategies over time.

Leumi UK – The London-based subsidiary of Israel’s international bank has appointed Peter Clayton as the bank’s new head of property finance to expand Leumi UK’s real estate lending activities. Reporting directly to Chief Business Officer Andy Mallin, Clayton brings over fifteen years of experience within property finance to Leumi UK and joins from Lloyds Bank where he held the role of relationship director within the real estate and housing team.

Caerus Debt Investments – Thomas Ertl has been appointed as co-CIO and member of the Caerus Investment Committee. Before joining Caerus, he was managing director and CIO of the London-based RiverRock European Real Estate Fund. His prior positions include ten years in various roles at Münchner Hypothekenbank eG where, among other things, he facilitated the commercial real estate direct financing business. Ertl was subsequently director real estate finance Germany at Lehman Brothers and then, as Executive Director, he led the real estate finance Germany team at Morgan Stanley Bank.

Intermediate Capital – Alexandra Lazarski and Rachael Pittaway have joined the company’s real estate team as associate directors reporting to Chris Nichols under the sale and leaseback strategy, while Jaynika Amin has joined the residential development team as an associate reporting to Jai Patel head of residential development. Lazarski has eight years’ experience working in European real estate markets and was previously a director of European acquisitions at Thor Equities. Prior to this, Lazarski was a financial analyst for CBRE Capital Advisors. Pittaway joins ICG Real Estate from Castleforge Partners in London, where she was a director of real estate investment management for the firm’s European real estate private equity fund and was responsible for the origination and evaluation of investment and asset management opportunities across the UK and Europe. Prior to this, she was a senior analyst in the real estate capital markets division at CBRE. Amin was previously on the investment banking graduate programme at BNP Paribas in London, where she spent significant time on real estate financing.

Union Investment Real Estate – Georg Niemeyer has been appointed head of data management, reporting and systems. He replaces Lars Scheidecker, who joined the senior management team of Union Investment Real Estate Digital, a Union Investment technology spin-off, on 1 September 2020. Niemeyer is joining Union Investment from the Otto Group, where he spent nine years in a range of roles, most recently as head of data management and technology. Prior to his time at the Otto Group, Niemeyer worked for various companies in IT and process consulting with a focus on business intelligence as well as finance and performance management.

Generali Global Infrastructure – The infrastructure asset manager has appointed Jonathan Aiach as investor relations director. Aiach’s arrival is part of the company’s accelerated growth, and in particular the expansion of its investment solutions and its European institutional investor base. Aiach started his career in 2008 at Cheyne Capital hedge fund in London as a hedge fund analyst, then joined BNP Paribas in 2009 in derivatives structuring. From 2013 to 2018, he contributed to the development of Blackrock’s alternative investment strategies in London and Geneva, with a particular focus on hedge funds and real assets. He previously worked for the private equity fund Oakley Capital in origination and business development roles. In 2018, Aiach became senior VP at DWS in London, responsible for the development of the infrastructure equity and debt platform.

Mitheridge Capital – The alternative investment firm has appointment Symon Elliott to its advisory group with non-executive responsibility for leadership and development. Elliott is founder of Leaders Futures, a mentoring enterprise that connects leaders to senior executives. Prior to this, Elliott was at Russell Reynolds for 18 years, where he led operations in the US, Europe and South Asia as well as overseeing the CEO and the board services practice.

Royds Withy King – Angela Gregson has joined the law firm’s London office as a partner in the property disputes team. She is a solicitor-advocate with extensive experience in all aspects of commercial and residential property litigation work.

Lead contractor GMI Construction is primed to start work on the £37m residential scheme, one of three developments Mulbury City is advancing in Manchester’s burgeoning New Cross district.

The developer won planning consent for the 12-storey project on Bendix Street last December, and a formal decision notice has now been handed down by the city council, paving the way for a start on site.

Earlier this year, investor Cheyne Capital Real Estate agreed to forward fund another of Mulbury’s New Cross schemes, a £32m 144-apartment development on Oldham Road.

The developer’s third New Cross venture is the 73-apartment Peeler’s Yard on Goulden Street.

All three of the projects were designed by Tim Groom Architects.

GMI is to build the Oldham Road and Bendix Street schemes and both projects are expected to complete by summer 2023, according to a construction management statement prepared by the contractor.

Meanwhile, On Goulden Street, Mulbury Homes, part of the wider Mulbury group, will build the eight-storey apartment block incorporating the listed former fire station at the site.

Elsewhere in New Cross, one of the seven neighbourhoods that make up the £4bn Victoria North masterplan, construction of Far East Consortium’s 80-home scheme on Addington Street started in March.

FEC’s in-house contracting arm DEX Construction is building the nine-storey block.

Dietmar Schmitt, a prolific international trader, says his new fund is ready to capitalise on Brexit and is calling for family investors.

Schmitt is the founding chief executive and chief investment officer of SAM Capital Partners, an independent alternative investments firm, based in London.

Originally from Wiesbaden in Germany, Schmitt started his career in the 1980s at Dresdner Bank where he worked in Frankfurt and New York. In 1990, he joined Morgan Stanley and held various roles as a senior European equity trader in London and Frankfurt. He was an acting junior board member at Morgan Stanley Bank in the late 1990s.

In 2001, he joined Cheyne Capital hedge fund as a senior portfolio manager. He left Cheyne fund in 2007 to pursue his ambition of setting up his own fund and launched SAM Capital Partners.

Schmitt will present his new SAM Capital UK Long Short Equity Fund to fellow members at the Campden Club Co-Investment Workshop on 30 April. He spoke with CampdenFB about his career to date, his background in family business, his investment strategy and what the fund has to offer.

Tell us your philosophy when it comes to investing and what have you learned in your journey in finance?

I’ve learnt a lot about what not to do. No one in the market is 100% accurate over time, but I know how to be careful and when to pull back. We maintain a strong focus on capital preservation. We don’t try to shoot the lights out, rather we protect capital and produce meaningful risk adjusted returns. The biggest mistake one can make, is risking too much and digging a deeper and deeper hole. If you lose 50% you have to make double that to regain the loss.

I understand stocks, how they trade and how they move. I understand the economics of stocks and the underlying companies. I do not take risks I cannot calculate.

Some 30-40% of the trades I do during the day won’t make money, that’s just part the business. Our profitable trades make more than the losses, resulting in positive returns on the day. In order to generate true alpha you have to be dynamic and come up with new trade ideas every day. This is what we do at SAM Capital Partners.

Growing up, were there expectations you would join your family business?

My parents were in the distilling business, it was the second largest brandy distilling business by volume in Germany until they sold it in the 1980s. Since then, we’ve been in German real estate, I manage the liquid assets.

My grandmothers had their own businesses, so there were opportunities to join family businesses, from the age of 16 I was more into stocks and trading than school, I was good with numbers.

I told my parents, and did an apprenticeship in a bank to acquire a banking licence. The plan was to study economics or law. The bank asked me to stay, and I said only if you make me a trader on the exchange in Frankfurt and New York. Sooner than I knew it, I worked in Frankfurt and was later transferred to New York.

My parents were shocked that I didn’t go to university, but I never regretted it and my parents are now very happy.

What was your career path until you launched SAM Capital Partners?

I left Morgan Stanley in 2001 to join a former colleague when he was setting up Cheyne Capital. I was running an internal fund there, with two investors only, his family and mine. In 2007, I spun off with my own company, SAM Capital Partners, where we for the first time opened for external investors. We have done really well—in 2008-09, during the financial crisis, we returned more than a 25% net to investors. We were growing and everything was going well.

I understand personal reasons prompted you to step away temporarily.

My wife got sick with cancer in 2011. I packed up to focus on the family. I kept my Financial Conduct Authority license and, three years ago, we reactivated the dormant company. We have a MENA (Middle East and North Africa) fund, we have done several deals amounting to €150 million+ ($180 million+) real estate transactions, and we also have a successful mergers and acquisitions advisory business. Now we are excited to launch our UK equity long-short fund with the same investment approach and strategy we had previously, as I’ve had continuously improved upon all my life.

Why did you choose the United Kingdom for your SAM Capital UK Long Short Equity Fund?

The reason is very simple—because of Brexit. With Europe moving together in the late 1990s, investor focus became more on sectors as opposed a country-approach.

With the UK now outside of the European Union, a new asset class is forming. Family offices and international institutional investors have significant UK exposure and the investment universe is plentiful across most sectors. Given the new political independence and structural independence from regulators, the UK should be considered a new independent asset class and we want to cater for it.

What is your fund offering?

We offer a short-term trading fund for investors who want to participate in intra-day market movements.

I’m not like Warren Buffett or traditional long-short fund managers, who buy and hold and charge the investor a storage fee. An analogy I like to use is that of a fruit trader—I buy and sell fruit all day long—apples, bananas, peaches, anything I can trade—and I make small amounts out of each trade. The more turnover I generate, the more money I can take home.

Normally, people with my skills and experience, don’t accommodate institutional investors: ‘A’, because they don’t want to talk to investors, and ‘B’, they’re not willing to operate in an institutional framework. We offer that infrastructure and for us it’s a privilege to connect with our investors too.

In addition to Brexit, currency and country risks are reasons for setting up the fund. Many investors think and invest in pounds, and we give them the option to manage currency exposure themselves. The UK is a big market, hyper liquid and fully transparent.

What is the timeline for your new fund?

The fund is set-up, the structure is there. We have calls with the chief investment officers of some large investors around the world. Once we have those investors on board and they allow us to publicise their names, it will give huge credibility to our business. We are open to have a conversation about favourable fees for early day investors.

What are the biggest risks you consider?

Country and currency risk, which we eliminate with investing only in one country. That leaves us with one main risk—single stock events. These are mitigated by our conservative position sizing and optimising a balanced portfolio. If you chase high returns, that’s the risk you run. We aim for low double digits returns. If we can make five base points a day, we’re happy.

Which stocks do you avoid?

Biotech is a hot topic at the moment, but it’s a long-term investment and not ideal for short-term trading due to high volatility and lack of transparency. We invest in hyper liquid and fully transparent stocks. We have a short-term holding period, from intra-day up to three weeks and we actively trade around every position.

How often do you do that?

Intra-daily, if I can turn over 100% of assets under management (AUM) and I make five basis points on every trade that generates 10% annualised return.

We run a balanced book and we are pure alpha generators. We are agnostic to the market goes up or down. What matters is that the longs don’t lose as much as the shorts, or the other way around when markets go up.

Twenty years ago, I was analysing every single investment case manually. Now we have an algorithm that identifies all possible trades and once we have identified opportunities, we look at the stock itself. Is there any news in the stock or in the sector? Are there any liquidity events, other news that effects the stock price? Once we have done that, we look at it as a fit for the portfolio.

Usually there are around 30-35 positions in the portfolio, longs or shorts. Positions are typically equally weighted between 3-5%, depending on the trading activity. That means we have about 100-150% of AUM in the market, we use very limited leverage. We are conservative and disciplined; we protect the money to the downside.

In 2008, we lost about 4.5% where the peer group was down 40% on average. In 2009, January and February, was a disaster for the markets, we made money. In March 2009, when the market fell sharply and then rallied hard, we made money. From November 2008, we had 16 consecutive profitable months. Why? Because we were disciplined. If the market is up 10%, you’re not going to make 10% with us, you make 2-3%. However, when the market is down 10%, we still perform. That’s how we generated outperformance of about 38% over the peer group and outperformed the market by 50%.

It’s not how much money you make in the good times, it’s how little you lose when things go wrong. It’s downside protection. Being conservative has proven to be a very good concept. When I was at Morgan Stanley in the 1990s, I generated about 30% of the profits with 1-2% of the capital that was used, trading around positions and that’s where my skillset lies.

How would you describe your team at SAM Capital Partners?

We have a very seasoned and institutionalised team with diverse backgrounds, and a track record of working together. On the advisory board we have Peter Willner, the chief investment officer of the Siemens pension plan.

Our third-party providers are of the highest calibre—Simmons and Simmons as lawyers, Northern Trust as the bank and Ernst & Young as the auditors.

What’s been your experience of engaging with family investors at SAM Capital Partners?

We worked with some great family office investors before my wife got sick, from the UK, Switzerland and Italy.

Our mandate is to make money over time for our investors and I enjoy engaging with family offices, to understand what they do and want to achieve, and hopefully help them in achieving their goals.

The Church Pension Fund (CPF), the sponsor and administrator of pension and other benefit plans for The Episcopal Church, announced that it invested $20 million in Turner Multifamily Impact Fund II (Fund), a $357 million workforce housing fund managed by Turner Impact Capital (Turner), one of the nation’s largest real estate investment firms dedicated to social impact investing. The Fund, together with the first Turner Multifamily Impact Fund, will enable Turner to acquire and manage up to 20,000 housing units across the country and keep them at rent levels that are affordable to residents earning less than the area median income.

Roger Sayler, Executive Vice President and Chief Investment Officer of CPF, said, “Turner Impact Capital has a long-tenured team with deep expertise investing in the affordable workforce housing market. We look forward to building our relationship with Turner Impact Capital as we continue to explore future positive impact investments that offer attractive risk-adjusted returns while also addressing key societal issues.”

Turner’s social impact mission extends beyond preserving this housing stock. Turner also offers residents a wide range of free enrichment services tailored to each community, such as afterschool homework help, employment assistance, community health services, and neighborhood watch programs.

Bobby Turner, Chief Executive Officer of Turner Impact Capital, said, “We are grateful to The Church Pension Fund for their support, and we are looking forward to working together in the future. While many investors have struggled to raise capital for social impact funds, we have seen remarkable interest due to our singular focus on impact strategies, the demonstrated success of our previous housing investments, and our proven track record generating superior risk-adjusted returns across complementary investment platforms that also include education and community-serving healthcare facilities.”

CPF’s socially responsible investments around the world focus on economically targeted initiatives (urban redevelopment, affordable housing, sustainable agriculture, and microfinance) and environmentally responsible programs (sustainable forestry, clean technology, and green buildings).

This transaction follows CPF’s prior socially responsible investments, which include investments with New Energy Capital Partners, Avanath Capital Management, Bridges Fund Management, Cheyne Capital Management, Developing World Markets, Social Investment Managers & Advisors, and SilverStreet Capital.

CPF also seeks to convene people and connect investors with socially responsible investing (SRI) fund managers and opportunities through its Insights & Ideas series of conversations. Earlier this year, it hosted a discussion on investing in economically disadvantaged communities, which follows other conversations focused on faithful investing, shareholder engagement, positive impact investing, and sustainable investing.