The fund is called Lend Lease Global Properties SICAF and the associated advisory company is called Lend Lease Global Real Estate Advisors S.A. The new firm formed by management of the advisory is called Ochtar Capital Partners. The sale includes the advisory business conducted by the advisory, two other companies and certain assets relating to the business. In addition to the fund, the advisory provided asset and development management services to joint venture partners on projects valued at $455 million.
In consideration of this transaction, when the fund is liquidated between 2006 and 2009 Ochtar will receive 25% and Lend Lease 75% of any incentive fees, which would be any profits received over a certain percentage return for the fund's investors. Lend Lease also will provide a working capital loan to the acquirer, together with transitional services for a period of six months. Lend Lease retains a $100-million investment in the original fund, which utilized $600 million of equity.
In a phone interview from his base in Hong Kong, the chairman and CEO of Ochtar Jim Quille tells GlobeSt.com Ochtar was formed in October in anticipation of the sale, and the opportunity is to take the platform and go do it again, says Quille. "When we formed the fund it was to be one of a series of funds," says Quille. "But when they decided they would not stay in the business, we as a team wanted to carry them on, and that's what we intend to do, bring another product to the market, and we have a lot of support from our investors."
The current fund is 65% office and rounded out with residential, retail and industrial and its geographic exposure is 85% Europe and 25% Asia. Quille says the next fund should be the same size and similarly focused on Europe and Asia, but with equal exposure between the two continents. "We are seeing a lot more opportunities in Asia at this moment," says Quille.
Ochtar has seven principals and a total of 32 employees divided among offices in Hong Kong, London, Seoul, Tokyo and Luxembourg. Quille says the new company is currently negotiating leases for new office space in the cities where it was housed with other Lend Lease operations. As is typical of advisory companies, Quille says Ochtar is compensated for its fund management with a fee that is a percentage of the equity invested.
In addition to Quille, who was previously chairman and CEO of Lend Lease Global Advisors, the senior executives of Ochtar include: Andrew Wood, COO, responsible for the day-to-day operations of the company and the European business; Alex Jeffrey, finance director, responsible for the management of all the financial and accounting functions; Digby Okell, responsible for investment management in Europe; Michael Wilkinson, responsible for investment management throughout the Asia region; Simon Treacy, responsible for all capital transactions and asset management activities in Japan; Brett Straatemeier, responsible for all corporate finance activities in Asia, and Moon Duck Kim, responsible for capital transactions activities in the Asia region.
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